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Pendragon lost £200m before tax in 2008

Pendragon has revealed that it lost £200 million before tax in the year up to December 31, 2008 in comparison to a £46.5 million profit in 2007.

The dealer group  posted an operating loss of £136.1m in 2008 compared to an operating profit of £105.8m in 2007.

Revenues were also hit, falling to £4.2 billion in 2008 in comparison to £5.1 billion in 2007.

Cash generated from operations was down to £53.6m in 2008 compared to £160m in 2007.

The company has also taken £60m of cost out of the business.

Trevor Finn, Pendragon chief executive, said: “In 2008 the Group faced the most severe market conditions since the early nineties.

“However management reacted quickly and decisively, reducing costs and closing dealerships no longer viable, and better positioning the group for the difficult conditions.

“More recently, we have renegotiated a new three year borrowing facility which gives us the necessary headroom to work through what we continue to expect to be continued difficult trading conditions."

The group closed or sold 53 dealerships in 2008 and is looking to close seven more before the end of 2009. Overall, 3,712 roles were made redundant in 2008.

Pendragon has said its banking covenants are now at levels which give the group flexibility for the next three years.

In its financial statement, Pendragon said: "We anticipate a stabilisation in the used car market this year which is a key area for us going forward.

“We expect the new car market to remain subdued for the next 12 months and then we believe a gradual improvement will be seen. The group is now well placed to take advantage of markets when they recover and is currently trading in line with our expectations.”

Pendragon's prestige Stratstone division saw an operating loss of £2.5m in 2008 in comparison to a £32.3m in 2007. Its Evans Halshaw volume division made a £6.1m operating profit, compared to £35.6m in 2007.

The Pendragon share price has been gaining strength since the start of the year and is now at 21.75p.

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