Franchises held by European Motor Holdings are outperforming the total market, says chief executive Richard Palmer in a bullish comment on the group’s half-year results.

He is optimistic about the eventual full-year figures following September, when EMH recorded a record profit for a month, but observers are cautious.

“EMH is not doing as well as Richard Palmer claims and the underlying figures suggest its performance was better a year or so ago,” says a senior motor industry analyst.

“It is taking EMH time to absorb dealerships bought at the right time in the capital cycle but, if it does, things should go in the direction he talks about.”

In the six months to August 31, says Palmer, the Smith Knight Fay group acquired in July contributed to the group’s “excellent performance in challenging conditions”. Profit was up 5.4% to £8.5m before exceptional items, tax and the effect of the SKF acquisition.

The pre-tax profit of £7.2m compared with £21.5m in the corresponding period in 2004 when the group’s performance was boosted by exceptional items of £13.4m (mainly a £12.3m VAT refund and associated interest).

This year’s exceptionals include a £952,000 loss from the closure of two MG Rover dealerships. EMH’s revenue, year-on-year, is £39m higher through the net effect of dealerships acquired, opened, sold or closed.

SKF added eight VW sites which means EMH represents the brand throughout Greater Manchester. Some analysts wonder whether it is over exposed to VW – Palmer was not available to comment.