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Pendragon refinances and reduces debt in first six months of 2013

Trevor Finn

Pendragon has seen pre-tax profits fall by 23% to £16.7million in the first six months of this year with turnover up 5% to 2.015 billion.

Underyling profit before tax increased by 24% by £4.5m to £23.6m.

The AM100 topping dealer group posted an increase in operating profits of 4% to £40.1m over the period and net debt was reduced by 33% by £73.4m to £147.3m.

Pendragon secured a seven year £175m bond and four year £145m revolving credit facility to help refinance the business.

Trevor Finn, Pendragon chief executive, said: “The group achieved strong performance in the first half of 2013 with underlying profit up 24%.

“The group has achieved like for like gross profit improvements in all motor division sectors.”

Pendragon’s used car business remains a key area of strategic focus with used vehicle volumes up 9%. New retail volumes increased like for like volumes by 20%.

Finn said: “The combination of reduced debt and the successful refinancing has ensured the group has conservative levels of borrowing and a robust balance sheet.

“Positive performing markets, improving operational performance and a balance sheet strength has put the group on a solid platform for future growth.”

The group has previously communicated its “strategic pillars” which it believes are vital in order to grow, including a value pricing structure, a large national footprint, scale and a superior IT platform.

Pendragon has 231 franchise points representing prestige and volume brands with its Stratstone and Evans Halshaw divisions. It also operated 14 dedicated used car locations under the Quicks name.

Aftersales

Aftersales like for like retail labour sales are flat year on year which Pendragon put down to the less than three year old vehicle market plateauing. On a like for like basis, aftersales gross profit increased by £1.1m, with gross marking increasing from 60.5% in 2012 to 62.7% in 2013.

Stratstone

Pendragon’s prestige division has 90 sites and new car profitability increased by 6% and aftersales profitability increased slightly by 1%.

On a like for like basis, new retail units posted growth of 14% with Pendragon put down to strong retail performance from BMW, Jaguar and Land Rover. The used car department increased volume by 2% on a like for like basis.

Evans Halshaw

Evans Halshaw has 132 franchise locations and gross profit for Pendragon’s volume division increased by £4.8m in the period. New vehicle gross profit increased by £4m in the period and used car gross profit increased by £1m.

The business saw strong performances from Ford, Vauxhall, Renault and Hyundai. Like for like used volumes increased for the division by 10%. Aftersales gross profit was in line with the prior year on a like for like basis.

Quicks

Pendragon’s used car supermarket saw a £1.6m increase in gross profit as a result of stronger used volume and used margin. The operation has seven sites and sold just under 3,900 used vehicles in the first half of 2013.



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