Leyland DAF in pounds 8.6m rebound: Management buyout brings a change in fortunes - and name

LEYLAND DAF Vans, formed out of the ashes of the collapse of Leyland DAF a year ago today, announced pre- tax profits of pounds 8.6m for its first eight months trading on turnover of pounds 80m - and a change of name to LDV.

Allan Amey, the chief executive who led the 3i-backed management buyout, said it was impossible to give a comparative figure for the previous year because of the way DAF's accounting systems worked, but that the results were ahead of business plan projections.

'They justify our belief that the van business is inherently profitable,' he said.

The company makes vans and mini-buses in Birmingham. When Leyland DAF was put into receivership at the beginning of 1993, its van division employed 1,800. The receivers slashed the number to 960 and there were doubts the factory could be saved.

Mr Amey was able to complete the first buyout from within the group (others, including Leyland Trucks, followed last summer), and he says the company is on an even keel. The van market turned up later than cars or trucks because small business purchasers remained cautious, but has been rising steadily since September.

Weekly production has risen from 200 to 250, and should reach 300 by mid-year, Mr Amey says. The peak, during the 1992 Continental boom, was 400. He expects LDV to manufacture 13,000 vehicles this year, against 7,000 in the eight- month period, and to turn over pounds 150m. The headcount has climbed back to 1,070.

Ten per cent of turnover came from panel-pressing for outside customers. It is a substantial supplier to Land Rover, which has been expanding production.

LDV is second in the British light van market, but still has only 14 per cent against Ford's 50 per cent. Mr Amey says the company has embarked on a pounds 30m model redevelopment programme, and that its strategy will be to produce variants in-house so that customers do not have to deal with separate bodybuilders.

'We've got to offer something others don't,' he said. 'We will be able to say we can produce what you want in the factory.' He is also hoping to win more external work to keep the presses busy.

The company used the DAF distribution network to sell up to half of its production abroad. This link was broken by the receivership, but Mr Amey says he is talking to DAF about re-establishing it. He expects LDV to export 1,000-1,500 vans this year.

LDV is 50 per cent-owned by directors and managers, 40 per cent by 3i, and 10 per cent by the workforce.