Interim Results

European Motor Hldgs PLC
18 October 2001



                     EUROPEAN MOTOR HOLDINGS plc ('EMH')

           Interim results for the six months ended 31 August 2001

Key points:


  * Profit before taxation up 12% to £5.5 million

  * Earnings per share up 13% to 7.0p

  * Interim dividend up 9% to 3.0 pence per share

  * Net cash £10.4 million

  * Major strategic territory gained for Volkswagen

  * Retail car washing contract signed by Wilcomatic with major store group

  * Very strong September performance

Commenting on these results, Chief Executive Richard Palmer said:

'I am delighted that these results continue to confirm our progress in all
areas of the business. The commencement of our new car washing initiative, the
gaining of a significant strategic territory with Volkswagen and our
exceptional September performance bode well for the future. The Group's
financial position is extremely strong and allows us comfortably to fund
future expansion.'

Enquiries:

Richard Palmer    Chief Executive
                  European Motor Holdings plc

Ann Wilson        Finance Director
                  European Motor Holdings plc

Morning:          Biddick Associates                              020 7448 1000

Afternoon:        European Motor Holdings plc                     020 8961 2525



Chief Executive's statement

In April, when I reviewed our performance for the previous twelve months, I
wrote about the progress that we had made and our belief that we were capable
of continuing to move forward. It is therefore pleasing to report that our
progress has continued in all areas of the business in the last six months.

Our profit before tax has risen by 12% to £5.5 million for the period to 31
August. Our earnings per share have risen by 13% and we are declaring an
interim dividend of 3.0 pence per share, an increase of 9% over the previous
period. This dividend will be paid on 3 December to shareholders on the
register at 2 November. Our net cash position has risen from £4.2 million at
31 August last year to £10.4 million this year.

Motor Retail Division

We have been able to take advantage of a recovering car market within our
motor retail businesses. In each month of this financial year to date, the
trading performance of our motor retail businesses has seen an improvement
over the previous year. This improvement is as a result of a number of
factors:


  * low interest rates, which have encouraged customers to replace their
    cars

  * prices, which manufacturers have reduced, now being more comparable with
    European levels

  * new models, which have stimulated growth

  * improved management of our businesses

  * our continuing focus on customer satisfaction.

We have continued with our strategy of expanding our franchise portfolio with
our existing core partners, namely BMW (GB) Limited, the Premier Automotive
Group and the Volkswagen Group and have continued to focus on the
opportunities that we are capable of exploiting profitably. During the period
we have opened MINI operations in three locations - Malton, Sunderland and
York - and acquired a Jaguar business in Doncaster. In the second half we have
already added one Volkswagen dealership and will open two Volvo dealerships in
Harrogate and Leeds.

The dispute regarding termination between Mercedes-Benz dealers and
DaimlerChrysler was settled before litigation commenced in the High Court. As
a result of the agreement, we will probably be exiting our Mercedes-Benz
passenger car operations in London at the end of June next year. The agreement
provides for a Territory Release Payment and also means that the staff
currently employed within our Mercedes-Benz businesses will be transferred to
the new owner of the territory who, in the case of each of our franchises, is
DaimlerChrysler itself. DaimlerChrysler will also buy our parts stocks and
certain specialised non property assets. The businesses' properties, including
a substantial freehold site in Park Royal, are outside this agreement and will
be sold or sublet to either DaimlerChrysler or other interested parties. The
result of these transactions will be a very substantial cash inflow for the
Group. We believe that the Territory Release Payment, calculated in accordance
with the Settlement Agreement but still to be confirmed by DaimlerChrysler,
will alone be in excess of £4 million. Whilst the replacement of our earnings
from our Mercedes-Benz businesses may not be immediate, I believe that, within
a reasonably short period of time, we will be able to replace the
Mercedes-Benz businesses' historical earnings with a combination of income
from new businesses and interest from the funds generated from cessation.

I am delighted to announce that we have been successful in winning a major
strategic territory for Volkswagen in the London area. Working with
Volkswagen, we will be able to develop this exciting opportunity which,
because of its size, will enable us to spread fixed costs more effectively at
the same time as offering customers high levels of service. The first
acquisition in respect of this territory took place on 3 October, when we
purchased the Heathrow Volkswagen business of Argent. Volkswagen has also
acquired a facility in Twickenham which we will lease and operate from next
year. Both of these operations complement our existing business at Hammersmith
and will make up a part of the new territory. We expect to make further
acquisitions in respect of this market area during the next year.

Our car import business has continued to perform well and we are pleased to
report that we will commence the importation of the Perodua Kelisa later this
year. We plan to launch this vehicle on 1 January 2002 and we have high
expectations for its success in the UK market.

Our auction businesses continue to improve in profitability and the
information that they supply to us with regard to car values and trends
continues to prove invaluable. We are currently considering the expansion of
our auction businesses.

Motor Services Division

Within our Motor Services Division, we have had an excellent start to the
year. We are delighted to announce that we have recently signed a contract
with Asda to install and operate wash centres for retail use at certain of its
superstore sites. Three wash centres are currently under construction and we
expect these to be operational in the next few weeks. When these have been
successfully launched, we will have a tremendous opportunity to roll out the
programme into other Asda stores. This development provides an exciting growth
opportunity for our Motor Services Division in the future. If in the UK we
follow the trend which has developed in the USA over the last ten years, there
will be significant growth in conveyor car wash operations in the UK. Within
the Division, we now have the ability to be both supplier of equipment and
service and operators of conveyor washes at high visibility sites.

In addition to the above excellent news for the future, it is also very
pleasing to report the rise in profitability which has been achieved at
Wilcomatic. By changing our principal supplier and broadening the range of
products and services that we sell, we have begun to make some real progress.
Our progress in our traditional business during the first six months, together
with our new retail washing opportunity, gives us great encouragement for the
future of our Motor Services Division.

Financial review

As stated above, profit on ordinary activities before tax for the six months
ended 31 August 2001 was £5.5 million compared to £4.9 million in the
corresponding period last year. The estimated effective tax rate for the
current financial year is 32%, the same as in the first half of last year.

Operating profit remains at 2.5% of turnover, the same as last year. However,
when the reduction in net interest payable is also taken into account, profit
before tax has increased to 2.5% of turnover, compared with 2.3% last year.
These ratios continue to be among the best in the industry.

As a result of increased profits, reduced borrowings and lower interest rates,
we have turned a net interest charge (excluding new vehicle stocking interest)
of £0.2 million in the previous period to a small net credit.

The Group continues to be in a very strong financial position, as evidenced by
the balance sheet, which shows net assets of £47.8 million or 89 pence per
share. We have invested £1.8 million in capital expenditure during the period,
whilst proceeds from disposals of fixed assets amounted to £1.4 million. Such
expenditure was at a relatively low level, as no major refurbishments were
required.

The Group's funding structure includes loans from some of the finance houses
which offer retail finance to our customers. During the period, £0.9 million
of these loans were repaid in the light of the Group's net cash position. The
remaining loans are at advantageous interest rates and no further repayments
are currently intended.

Management of our working capital has continued to be very good during the
period, with particular emphasis on tight control of used vehicle stocks. We
have again managed to maintain our used vehicle stocks at very low levels
prior to the influx of part exchanges for new vehicles registered in
September. As a result, working capital has been reduced by £2.6 million
during the period. Payments in respect of taxation amounted to £1.2 million.
The net effect of these cash flows and of the £6.8 million operating profit
(excluding depreciation) in the period is to increase the Group's net cash of
£2.5 million at 28 February 2001 to £10.4 million at 31 August. This has
resulted in the Group again being ungeared at the balance sheet date.

The Group's net cash position at 31 August is not representative of the year
as a whole because, immediately prior to a month with a registration plate
change, used vehicle stocks and vehicle debtors are lower than at other times
of the year and we are in receipt of deposits on cars being prepared for sale
in September. Additionally, the Group's net cash position at 31 August is
always better than at the financial year end because payment of the bulk of
the previous year's corporation tax, its final dividend and the current year's
interim dividend all take place in the second half. However, these factors
should not detract from the Group's excellent performance in continuing to
generate cash in the period.

Outlook

Notwithstanding the terrible and tragic events which took place in the USA in
September, the Group's September performance was significantly better than
last year with substantially more vehicles sold, although the majority of the
vehicles retailed in the month would have been ordered many weeks earlier.
Whilst the market will, as usual, slow down towards the end of the calendar
year, we continue to see positive signs for next year, but outside economic
forces could, of course, hamper this progress.

We have been very fortunate in our choice of manufacturer partners. As
indicated above, in the current period, we have expanded our relationship with
BMW (GB) Limited, we are in the process of expanding our relationship with the
Volkswagen Group, and we are opening new dealerships with the Premier
Automotive Group during this financial year.

Our Motor Services Division's future prospects are excellent, with our
exciting new retail washing venture and our continuing success with our new
supplier.

As you can see, our financial situation is excellent and we have the ability
easily to fund the further expansion of our business.

We expect to make further progress in the remainder of the financial year.

Richard Palmer

Chief Executive

18 October 2001



CONSOLIDATED PROFIT AND LOSS ACCOUNT
                                        Notes        Six        Six       Year
                                                  months     months      ended
                                                   ended      ended         28
                                               31 August  31 August   February
                                                    2001       2000       2001
                                                   £'000      £'000      £'000

Turnover                                    1    221,199    209,099    399,678
Cost of sales                                   (189,405)  (179,266)  (340,820)

Gross profit                                      31,794     29,833     58,858
Distribution costs                               (14,601)   (14,084)   (27,814)

Administrative expenses                          (11,690)   (10,607)   (22,125)

Operating profit                            2      5,503      5,142      8,919

Interest receivable                                  255        154        360
Interest payable                                    (244)      (383)      (820)

Profit on ordinary activities before               5,514      4,913      8,459
taxation

Tax on profit on ordinary activities        3     (1,764)    (1,580)    (2,817)

Profit on ordinary activities after                3,750      3,333      5,642
taxation

Equity minority interests                              -        (13)       (13)

Profit for the financial period                    3,750      3,320      5,629

Dividends                                   4     (1,614)    (1,479)    (3,496)

Retained profit for the financial period           2,136      1,841      2,133


Earnings per share (basic)                  5       7.0p       6.2p      10.5p


Earnings per share (diluted)                5       6.9p       6.2p      10.5p


Dividend per share                          4      3.00p      2.75p      6.50p


There are no recognised gains or losses other than the profit for the period
as reported above.


CONSOLIDATED BALANCE SHEET  
                                                       31        31         28
                                                   August    August   February
                                                     2001      2000       2001
                                                    £'000     £'000      £'000

Fixed assets
Tangible assets                                    29,632    31,384     30,550
Goodwill                                               73        77         75

                                                   29,705    31,461     30,625

Current assets
Stocks                                             68,188    59,857     65,690
Debtors                                            15,975    16,639     18,026
Cash at bank and in hand                           21,448    17,578     13,535

                                                  105,611    94,074     97,251


Creditors: amounts falling due within one year    (85,750)  (78,146)   (80,424)


Net current assets                                 19,861    15,928     16,827


Total assets less current liabilities              49,566    47,389     47,452


Creditors: amounts falling due after more than       (544)     (504)      (421)
one year


Provisions for liabilities and charges               (731)     (699)      (720)


Deferred income                                      (442)     (765)      (598)

                                                   47,849    45,421     45,713


Capital and reserves

Called up share capital                            21,513    21,513     21,513

Share premium account                              26,476    26,476     26,476

Profit and loss account                              (140)   (2,568)    (2,276)

Equity shareholders' funds                          47,849    45,421     45,713


Gearing                                                nil       nil        nil


Net assets per share                                 89.0p     84.4p      85.0p



CONSOLIDATED CASH FLOW STATEMENT
                                                   Six         Six 
                                                months      months        Year 
                                                 ended       ended       ended
                                                    31          31          28 
                                                August      August    February 
                                                  2001        2000        2001
                                                 £'000       £'000       £'000


Net cash inflow from operating activities        9,394      12,340      16,873

Returns on investments and servicing of finance     11        (229)       (460)

Tax paid                                        (1,187)       (792)     (2,603)

Capital expenditure and financial investment      (379)        131        (686)

Acquisitions and disposals                           -        (100)       (100)

Equity dividends paid                                -           -      (3,362)

Net cash inflow before financing                 7,839      11,350       9,662

Financing                                           74        (157)     (2,512)


Increase in cash in the period                   7,913      11,193       7,150



Reconciliation of operating profit to net cash flow from operating activities

                                                   Six         Six        
                                                months      months        Year
                                                 ended       ended       ended
                                                    31          31          28  
                                                August      August    February 
                                                  2001        2000        2001
                                                 £'000       £'000       £'000

Operating profit                                 5,503       5,142       8,919

Depreciation and amortisation                    1,307       1,309       2,966

(Profit) on sale of tangible fixed assets           (8)         (9)         (8)

(Increase)/decrease in stocks                   (2,498)      2,740      (3,093)

Decrease/(increase) in debtors                   2,051       1,175        (212)

Increase in creditors                            3,039       1,983       8,301


Net cash inflow from operating activities        9,394      12,340      16,873


Analysis of changes in net cash

                            At 1 March   Cash flow     Other non    At 31 August
                                  2001              cash changes            2001
                                 £'000       £'000         £'000           £'000

Cash at bank and in hand        13,535      7,913             -          21,448

Bank overdraft                       -          -             -               -
                                13,535      7,913                        21,448


Debt due within one year        (6,922)       911          (11)          (6,022)

Debt due after one year            (17)          -          11               (6)

Finance leases                  (4,077)      (985)            -          (5,062)

                                              (74)


Total                            2,519      7,839             -          10,358


NOTES TO THE STATEMENT OF PRELIMINARY RESULTS

 1. Analysis of turnover

                                Six months        Six months               Year
                                     ended             ended              ended
                                 31 August         31 August        28 February
                                      2001              2000               2001
                                     £'000             £'000              £'000

Motor Retail Division              213,387           201,988            384,950

Motor Services Division              5,704             5,051             10,475

Other Businesses                     2,108             2,060              4,253

                                   221,199           209,099            399,678


2      Analysis of operating profit

                            Six months         Six months                 Year
                                 ended              ended                ended
                             31 August          31 August          28 February
                                  2001               2000                 2001
                                 £'000              £'000                £'000

Motor Retail Division            5,912              5,782                9,982

Motor Services Division            362                167                  655

Other Businesses                   127                104                   89

Central costs                     (898)              (911)              (1,807)

                                 5,503              5,142                8,919

3      The charge for taxation is based on the estimated effective rate for the
       financial year.

4      An interim dividend of 3.00p (2000, 2.75p) per share will be paid on 3
       December 2001 to shareholders on the register at 2 November 2001.

5      The calculation of earnings per share for the six months ended 31 August
       2001 is based on the profit for the financial period of £3,750,000
       (2000, £3,320,000) and on 53,784,710 (2000, 53,784,710) ordinary shares,
       being the weighted average number of shares in issue during the period.
       The number of dilutive potential ordinary shares arising from share
       options, as calculated in accordance with FRS 14: Earnings per Share, is
       239,726 (2000, nil). Therefore, the calculation of diluted earnings per
       share is based on the profit for the financial period of £3,750,000
       (2000, £3,320,000) and on 54,024,436 (2000, 53,784,710) ordinary shares.

6      This interim statement has been prepared on the basis of the same
       accounting policies as those set out in the financial statements for the
       year ended 28 February 2001, except for the adoption of FRS 18:
       Accounting Policies and FRS 19: Deferred Tax. No restatement of prior
       years' figures has been required by the adoption of FRS 18 or FRS 19.

7      This interim statement was approved by the Board of Directors on 18
       October 2001. The foregoing financial information does not represent
       full accounts within the meaning of Section 240 of the Companies Act
       1985 and has been neither reviewed nor audited by the auditors nor
       delivered to the Registrar of Companies. The above results for the year
       ended 28 February 2001 have been abridged from the full Group accounts
       for that period, which received an unqualified auditors' report and
       which have been delivered to the Registrar of Companies.