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Pendragon profit slump

Pendragon’s profit before tax fell by £18 million to £33.5m in the six months to June 30, 2007.

Pre-tax profits before exceptionals were down to £32.7m over the same period compared to £43m last year.

Operating profit before other income fell by £15.6m to £54.5m.

Despite the drop in profits, the dealer group’s revenue rose to £2.7bn compared to £2.62bn in 2006. Gearing was reduced to 86% compared to 121% in December.

Pendragon said the net effect of acquisitions and disposals of dealerships over the past eighteen months had been to increase revenues year on year by £77.3m to £2,702.4m.

On a like for like basis revenue is down 3.0% which the company said was due to selling less used cars in the first half of the year than expected.

Underlying operating profit was £61.3 million compared to £73.5 million last year. The underlying operating profit margin was 2.3% against 2.8 % for the same period in 2006.

Trevor Finn, Pendragon chief executive, said: "The UK motor retail sector has faced a challenging time this year, and as previously announced this has affected our results for the six months. Throughout the period we have remained focused on scale efficiencies and cash management as we reduce our debt levels following the acquisition of Reg Vardy last year.

"These conditions offer a market leader like Pendragon many attractive growth opportunities, such as the acquisition of the 19 dealerships announced last week. We expect to identify further opportunities as smaller competitors seek to exit the market."

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