Pendragon roars on as H1 car sales remain robust

MIDLANDS based automotive retailing group Pendragon has seen growth in half year revenue and pre-tax profits as business in the new and used car markets remained robust.

The company said almost three quarters (74%) of its new car sales was due to an upturn in fleet orders.

It remains confident of the trading momentum continuing into the second half.

Pendragon said revenues for the six months to June 30 increased to £1,914m (2011: £1,773m), while pre-tax profit rose to £19.1m (2011: £17.7m). Both increases were said to be in line with expectations.

New vehicle volume growth was 13.9% on a like for like basis, outperforming the market. There was also a market-busting performance in the used vehicle market, which saw like for like growth of 7.5%.

The company, which has 236 franchised outlets, operates in two principal markets. Its Stratstone dealership network sells prestige and luxury vehicles such as Aston Martin, BMW, Ferrari, Jaguar Land Rover and Porsche, while its Evans Halshaw arm concentrates on the volume sector with brands such as Chevrolet, Citroen, Ford, Hyundai, Kia, Nissan, Peugeot, Renault and Vauxhall.

The company also operates a successful aftersales business but trade here was sluggish due to a decline in the number of warranties being taken out on vehicles. However, servicing saw a small improvement over the period.

Stratstone saw revenues by 13.6% year on year on a like for like basis owing to strong growth both in used and new cars.  Like for like gross profit increased by 3.6% in the period owing to increases in used and new activity.  Aftersales has been impacted by a reduction in warranty work.  However, like for like retail sales were up by 1.2%, which the company said was encouraging.  Used volume increased by 24.6% on a like for like basis.

Evans Halshaw saw its revenues up by 5.6% year on year on a like for like basis, again owing to strong growth in both new and used volume.  Like for like gross profit increased by 2.0% in the period owing to increases in used and new activity.  Used volume increased by 3.4% on a like for like basis.

The company also operates a US business consisting of nine franchise points in Southern California selling Aston Martin, Jaguar and Land Rover brands.  Revenue here increased by 0.9% on a like for like basis over the prior year.  

Trevor Finn, group chief executive, said: “Overall the group delivered results for the first half in line with our expectations.  Our New and Used sectors performed particularly well over the six month period, with results across the group generally improving into the second quarter of 2012.
“Trading momentum in New and Used is expected to continue into the second half of the year and the group’s current performance remains consistent with the board’s expectations for the full year.”

He added that in line with earlier statements, it remained the board’s intention that the company resumed paying dividends in relation to its 2012 financial year and onwards.

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