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Pendragon confident for satisfactory results

Pendragon has announced that its performance in the first three months of the year is “encouraging” and is confident of a satisfactory outcome to the year at the upper end of expectations.

The figures are likely to be boosted by £5 million of VAT repayments from the HMRC which are owed to Pendragon for this financial year, taking its total repayments to £15m.

HMRC conceded that it must pay claims for overpaid VAT on demonstrators and manufacturer bonuses that it had previously believed it did not need to pay in full.

While Pendragon said it had received assessments from HMRC, it was unable to quantify the outcome for the repayments which “may take a number of years to resolve”.

Pendragon’s new car sales volumes for the first quarter were down by over 4% compared with last year.

The dealer group faired better with used car sales volumes, which were up year on year by 2%.

Pendragon said in a statement ahead of its AGM: “Trading conditions have remained uncertain into 2008, mainly because of turmoil in financial markets and poor clarity on how large the impact of credit tightening and house price falls will be on retail markets for the remainder of the year.”

Pendragon said it had been affected by an economic slowdown in California at its US operations, but added that the new Jaguar XF would help mitigate the problem throughout the remainder of the year.

Stratstone

Pendragon’s luxury retailing arm, Stratstone, increased registrations by 2% in the first quarter to 143,400 units.

Jaguar registrations were down by 16% to 5,222 units in the first quarter, which Pendragon attributed to the launch of the new XF in March. However, the group said it has received firm orders for the model for the next six months.

Overall car sales from Stratstone were up 2% in the first quarter.

Pendragon stated: “We have been able to increase used car volumes significantly year on year and the profit trend in used car margins is improving and is ahead of last year's average.”

Evans Halshaw

Pendragon’s volume retailing arm, Evans Halshaw, saw new car registrations fall by 2% in the first quarter to 365,300 units. Both Ford and Vauxhall were down by 2%. New car sales were down by just over 3%, which Pendragon believes “reflects the true market”.

Used car sales volumes in Evans Halshaw were down 3% year on year and Pnedragon said margins remained below those achieved last year.

Pendragon said: “This has in part been due to the roll out of our used car strategy which in implementation phase tends to reduce margins as stock profile is changed.

“We continue to roll out our strategy to target a wider age profile of used car sales which will yield benefits in the remainder of the year.”

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