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Pendragon shines despite fall in market

Pendragon has reported profits before tax of £42.3 million and revenue of £2.7 billion for the half year to the end of June.

This compares to £36.8 million and £1.8 billion respectively in the same period in 2005.

Chief executive Trevor Finn said: "Trading performance across the group has been good in the first six months of the year against the backdrop of a weaker UK new car market. We are reporting growth of 14% in adjusted earnings per share and an increase in the interim dividend of 10%. We bought Reg Vardy in February this year which has contributed £19.9 million of operating profits in the four and a half months of our ownership.

“The focus in the first half has been on the Pendragon/Vardy integration and putting in place a new UK operational structure whilst maintaining profitability. We have also rolled out our new in house dealer management system to a further 47 locations so far this year. Our drive to increase efficiency through further centralisation of certain dealership functions into our customer services centre in Nottingham has continued.

"Group revenues have increased by £894.3 million to £2.7 billion. The impact of acquisitions and disposals we made in 2005 and 2006 have added £856.3 million to revenues. The core businesses on a like for like basis grew revenues by £13.3 million which was achieved despite a fall of 4.2% in new car registrations in the UK market with a further £24.5 million contributed from recent greenfield start ups.

"Operating profits, before one off exceptional items, were £73.3 million compared to £56.7 million last year. The underlying operating profit margin was 2.8 per cent against 3.2 per cent for the same period in 2005. The acquisitions made this year and in the second half last year have had a dilutive effect on the margin.

"The property sale and leaseback joint venture completed at the end of 2005, whilst having little impact on profit before tax, has reduced operating margins which now include the additional rents. Excluding the impact of the acquisitions and property joint venture, operating margins achieved this period were in line with last year at 3.1%. The interim dividend is 7.25 pence per share compared to 6.60 pence last year, an increase of 10%."

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