Dealer back on the road to recovery

The Glasgow-based firm - which has Land Rover and Toyota dealerships in Glasgow and Hamilton - made a pre-tax loss of 421,000 in the year to 30 June, compared with a 1.2 million loss in the previous 12 months.

Turnover at the company, which also sells used cars from "Autopark" centres at its two dealerships, rose from 57m to 64.8m, according to accounts filed at Companies House.

In July - after the year-end for the newly-filed accounts - Shields sold its Ford, Mazda, Mitsubishi and Peugot franchises for 2.5m to Vertu Motors, the highly-acquisitive car dealer.

Aim-quoted Vertu operates under the Macklin Motors brand in Scotland.

At the time, Shields chairman and managing director Joe O'Donnell said: "Few people know that we're both a motor dealer and also a property company and the property side of this deal was too good to miss.

"The sale will reinforce our balance sheet and will allow us to still benefit from leasing the sites to Vertu."

In its accounts, Shields revealed: "Those franchises had contributed significantly to recent trading losses and it is anticipated that, by focusing on other franchises, the company can return to profitability."

When it bought the showrooms, Vertu said the dealerships had generated sales of 27.1m in the year to 30 June, 2009.

Shields company secretary Elspeth Macnaughton said: "The 2010 results reflect an improvement in the general economic conditions, the impact of the cost reduction actions taken in the latter half of the previous year and a reduction in the losses from the company's most recently-acquired franchises."

Shields' headcount fell from 175 to 164, with staff costs down from 4.5m to 4.3m. The pay packet of highest-paid director, thought to be O'Donnell, fell from 126,000 to 103,000.