The UK’s largest automotive retailer has driven up interim pre-tax profits by 71%, assisted by its takeover of rival Bramall in March. In the six months ending June 30, profits rose to £40.6m against £23.7m recorded in the same period last year. The company has also reported a climb of 68% in turnover from £948m to £1.6bn, of which Bramall contributed £669m.
Pendragon’s existing operations contributed £932.2m, which on a like-for-like basis, represents a 7% increase in turnover compared to the previous year. The results put the business on track to achieve an end of year turnover above £3bn.
Pendragon chief executive Trevor Finn says the integration of the Bramall business is progressing well, and offering opportunities to benefit from greater economies of scale. He claims the company is also benefiting from greater commercial independence under the revised block exemption rules.
“Our year started well, and trading continues to be good. Integration of CD Bramall is ahead of programme and the benefits are already flowing through,” says Finn in the results announcement.
“We are confident the group will continue to build on the success achieved so far this year.”
According to Finn, Pendragon’s further growth in the UK is likely to come in the form of bolt-on dealerships rather than major acquisitions while the business concentrates on cutting net debt of £287m that was largely incurred in order to finance the Bramall takeover.
Since the acquisition, Pendragon closed CD Bramall’s head office in Harrogate, North Yorkshire, and cut 40 jobs, reflected in the half-year results by a £4.3m deficit in exceptional operating costs. It also sold three Bramall dealerships, two of which (both Audi) were bought back by Tony Bramall. An interim dividend of 4.2p per share, compared to 3.8p last year, is payable from earnings per share up 76%, from 12.7p to 22.4p.
nReg Vardy Group this week announced it has bought back 90,676 ordinary shares at 413p per share, following a fall in the share price to a 52-week low. It follows a similar purchase last month.