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Pendragon says progress was made in Q3 trading

Trevor Finn

Pendragon has this morning reported a Q3 trading performance with new car volume and used car margin ahead of the prior year.

The UK’s largest franchised dealer, headed by chief executive Trevor Finn (pictured), said as a result operating profit is up £1.5m in the quarter compared with Q3 2011, including an improvement in its Quicks used car supermarkets.

Aftersales turnover and margin was in line with the prior quarter, Pendragon said, however overall gross profit was down marginally.

With the national parc of 0-3 year cars now increasing, the group is committed to enhancing profitability in aftersales through initiatives including its vehicle health check programme.

Like-for-like used car volumes were up by 2.8% in Q3, and Pendragon said it has grown used car volumes by 40% in the last three years.

Used car margin was up 0.7% in Q3 compared to the prior year, and overall like-for-like used gross profit in the quarter was 11.7% ahead of the prior period.

With new cars, Pendragon said, it has increased its retail sales, excluding Motability, by 12.3% over the first three quarters of the year, outstripping the 11.2% national growth of the brands it represents. New retail margin has been maintained in the period, it added.

Within that, its Stratstone premium franchise division grew retail sales by 21.4% compared to a 13% national increase for the brands represented, and its Evans Halshaw volume franchise division grew retail sales by 8.8%, compared to 8.8% national growth.

Financially, working capital management and net debt were in line with Pendragon’s expectations for the period, and it expects the 'debt to underlying EBITDA' ratio at the year end to be less than 2.0 and the continuing debt reduction will bring the ratio to its medium term target of 1.5 by the end of 2013.

Its statement concluded: “Underlying trading performance remains in line with our expectations for the full year. Used performance continues to be a differentiator for the group and we believe this will continue in the final quarter with further recovery in used margin.

“The new retail car market has performed ahead of the comparator period throughout the year and we expect that to continue in the fourth quarter. Aftersales performance remains resilient.

“Progress on our reduction in 'debt to underlying EBITDA' is in line with our expectations for the year end giving confidence in achieving our target by the end of next year.”

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