UK car retailer European Motor Holdings has reported a 24% rise in underlying full-year profit and said the new year was off to a strong start, pushing its shares up sharply.


According to Reuters, the group, which operates 40 motor vehicle retail franchises from 35 sites in the UK, said like-for-like volumes of new cars sold in March and so far in April were 15% up on the previous year in both months.


The news agency noted the performance is considerably stronger than the overall UK market, where March sales rose 6.6% from a year earlier and said European Motor is benefiting from strong demand for the luxury car brands for which it holds franchises – Audi, BMW, Volvo and Jaguar.


Chief executive Richard Palmer reportedly said he expected these brands and some others to continue to outperform the overall market this year.


Reuters said European Motor’s pre-tax profits before exceptional items and goodwill came to £13.9 million ($US24.9 million) for the year to February 29, up from £11.2 million the previous year and ahead of consensus market forecasts of £12.6 million.


Profit rose 14% to £490 million and at year-end it had net cash of £13 million, the report added.


Palmer told Reuters the buoyant market was being driven by cheap credit due to Britain’s low interest rates and reduced selling prices to bring the UK in line with the rest of Europe.


As interest rates on car loans were fixed at the time of purchase it was unlikely anticipated future rate hikes would deter buyers, Palmer reportedly said, adding: “We have much to look forward to in the coming months and… we expect to make complementary acquisitions and continue to improve our existing business.”


Reuters said Palmer dismissed market talk of a takeover by larger UK car dealer Inchcape.


“Whilst we may be attractive to others, they would have to hold the same franchises we do (and) we have certainly had no approaches,” he reportedly said, adding the firm would consider any “aggressive offer” if it came up.