Pendragon expects to be ahead of expectations after sustained car sales
MIDLAND-based car dealership, Pendragon, has said it expects full-year profits to be ahead of expectations after a strong and sustained sales period.
The company, which operates the Stratstone and Evans Halshaw brands, said in a statement covering the period from July 1 to October 27 that “following continued performance improvement, the group is now anticipating to be materially ahead of expectations for the full year”.
“The group is pleased with progress across all areas with gross and departmental profit ahead in each of our key sectors of aftersales, used and new. The improved performance of the group is due to a combination of the strategic initiatives which we have embedded in the business, and improved market conditions.”
The Stratstone network sells prestige vehicles such as Jaguar, Land Rover and Aston Martin, while the Evans Halshaw dealerships focus on the volume markets.
The aftersales sector encompasses the service, maintenance and repair of motor vehicles and is determined by the size and age of the national vehicle parc (the number of cars on the road). It said following a period of decline, the national parc of vehicles under three years old has been increasing due to growth in the new vehicle market.
The group’s key measure of aftersales growth is the movement in retail labour sales activity. In the period, the group increased retail labour sales by 2.9% and overall gross profit increased by 6.4% on a like for like basis.
The used market is said to have been stable, with a market opportunity of 6.7m vehicles for the rolling 12 months to the June 30, 2013 (the latest available data).
The group said it continued to differentiate itself in this area achieving a 17th successive quarter of growth in volume and continues to grow market share. In the period, the group’s like for like used units increased by 9.7% with year to date growth of 8.9%. Gross margin remained stable in the period.
The new sector consists of the first registration of cars and commercial vehicles. The new car market has been strong in the UK for the whole year. For the nine months ended September 30, 2013, new retail registrations increased by 16.7% and the total market increased by 10.8%.
