Pendragon cautiously optimistic for second half

MIDLANDS-based car giant Pendragon, which owns the Stratstone network of luxury car dealers, has said it remains “cautiously optimistic” about its prospects for the remainder of 2010.

The Nottingham-based company, the UK’s largest car dealer, said that aftersales profitability in the first half of the year has continued to improve year on year.

The company, which also operates the Evans Halshaw mid-market dealerships, said that it was pursuing a strategy to grow aftersales profitability and had a number of initiatives in the pipeline.

Pendragon reported that, as forecast, used car sales volumes have continued to grow year on year and used car margins have stabilised.

Used car margins are expected to remain stable and used car volume expected to grow during the year, the company said.

Pendragon said: “Excluding scrappage, group new retail car sales are outperforming the market. Premium new car sales continue to demonstrate the “V” shaped recovery profile. Volume new car sales have stabilised following the end of scrappage.

“Our net debt levels at June 30 will be higher than expected, almost all due to new vehicle stock related to new product launches. We anticipate this will have reversed by the year end. Reduction of debt remains a top priority and is under strict control.”