CAR dealer, Reg Vardy, has announced a growth in both profit and turnover despite consumer fears that British cars are overpriced.

Although sales of new cars have been seriously affected, the fears, combined with uncertainty over when the Government will act on this issue, the company announced an 18 per cent jump in full year pre-tax profits.

The Sunderland-based operation also hinted that future acquisitions maybe on the horizon.

Finance director Gerard Murray said: "One of the many good things about the results is the amount of cash the group has generated. This has put us in very good shape for any future acquisitions."

The company admitted the launch last September of a "Rip-off Britain" campaign by the Consumers' Association designed to get shoppers to boycott showrooms and buy their cars on the continent had "seriously affected" the industry.

The result of the campaign was that shoppers flocked to Europe to snap up new cars, making savings of up to 40 per cent.

The industry was also hit by the delay in publishing the Competition Commission's report into car pricing.

The Department of Trade and industry (DTI) recommended new vehicle prices be cut by between ten and 12 per cent, a move Reg Vardy chairman Peter Vardy said needed to be enacted this month to remove uncertainty in the market ahead of September's car registration prefix change.

Despite this, sales as a whole at the company, were up 8.5 per cent in the year to 30 April, increasing to £1.3bn from £1.1bn last year.

Pre-tax profit was up 18 per cent to £33.2m, compared with £28.1m in 1999.

The company has been cutting back on its dealerships, ending its Peugeot franchise in December and its Honda dealership in May.

From the end of 2000 it will stop representing Toyota.