Following the profitability trend set by players within the new cars market, listed motor dealer Car & General recorded a 13% dip in pre-tax profits to Ksh 279 mn (US$3.7 mn) for the year ended September 2009. Despite the decline in profit, the group's turnover climbed rapidly by 45% from Ksh3.0 bn (US$43 mn) to Ksh4.3 bn (US$58 mn) during a period when inflation was high and car dealers were increasingly placing more emphasis on careful marketing spend to drive sales growth.

Data from the statistics bureau indicate the level of new vehicle registrations (annualized) had plateaued in June 2009 and is roughly ranging 153,000 to 156,000 vehicles per year. The poor performance for the new car market was also confirmed by the Kenya motor industry association that recorded a 22% dip in new car unit sales from 13,135 in 2008 to 10,250 in 2009 (this is against a 38% and 1% respective rise in 2007 and 2008). Apart from being a car dealer, Cargen stocks a range of products that include Cummins generators, Briggs and Stratton engines and water pumps, TVS & Suzuki motorcycles, Piaggio three and four wheelers and TAFE tractors.

The impact of high cost of sales (highly influenced by the weaker shilling) that grew by 52% pushing the gross margin lower from 24.4% 20.8%; however, gross profits rose by 23% to Ksh902 mn (US$12 mn). Operating profits rose marginally by 1% from Ksh377 mn (US$5.0 mn) to Ksh380 mn (US$5.1) as the company saw their fixed costs cut further into the operating margin. The biggest culprit responsible for raising operating costs were selling and distribution costs that rose 89% during the period. This particular cost component is expected to remain a crucial factor for future profitability given the geographical spread of CarGen's operations that now cover the Rwandan market (in addition to the other East Africa countries).

The group's financing costs rose 83% to Ksh101 mn (US$1.3 mn) at a time when car dealers were borrowing short term funds to bridge the funding deficit created by their working capital requirements. The group's EPS dipped 7.8% from Ksh9.50 per share to Ksh8.80 per share in 2009 and the board continued the conservative dividend policy that has seen Cargen payout Ksh0.67 per share in dividends for the past seven years. As at the 28th of January 2010, the company had a market capitalization of Ksh758 mn (US$10 mn) and a PE ratio of 3.9x.