Pendragon, the largest dealer group in the UK, has posted profits before tax of £11.4 million for the first half of this year, in comparison to £21.1 million over the same period in 2008.
Group operating profit was down from £41.2m to £33.4m and revenues were down from £2.5bn to £1.6bn.
Pendragon’s prestige Stratstone business saw revenues drop from £1.07bn to £670.5m and underlying profit fell from £18.8m to £9.6m.
The volume focussed Evans Halshaw business saw revenue drop from £1.35bn to £870m and underlying profits were reduced from £17.6m to £11.2 million.
Trevor Finn, Pendragon chief executive, said: “The first half of 2009 has seen a very challenging car market. Despite this, a significant turnaround from the loss incurred in the second half of 2008 has been achieved as a result of the decisive actions taken by management to reduce costs and close non viable dealerships.
“In addition to negotiating a new three year borrowing facility we have reduced debt levels in the first half of the year which underlines the financial stability of the group in what remain challenging trading conditions.”
Finn said Pendragon had continued to get staffing and stock levels at the right level for the "appropriate level of activity we are experiencing".
He said: "We have continued to keep our franchise portfolio under review and have as a consequence closed a further 14 franchise points in the first half of this year."
Pendragon's main focus for the second half of this year will be to keep costs in line, generate cash to get its debts down and build volumes, with a particular focus on its used car business.
Finn said: "June 2009 wholesale used car values increased for the eighth month in succession.
"This has been due to demand outstripping supply and has been beneficial to us in respect of greatly improved used car margins and the discontinuance of the exceptional stock losses incurred last year. Aftersales has continued to be a stable part of the business."
- Revenue of £1,586 million (2008: £2,478 million)
- Operating profit £33.4 million (2008: £41.2 million)
- Underlying operating margin 1.9% (2008: 1.9%)
- Profit before tax £11.4 million (2008: £21.1 million)
- Profit before tax and non-recurring items £8.7 million (2008: £17.9 million)
- Basic earnings per share 0.9p (2008: 2.0p)
- Adjusted earnings per share 0.7p (2008: 1.5p)
- Net borrowings down £39.6 million since year end
To download Pendragon's full interim statement click here.