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Pentagon Group eyes improvement despite £472m turnover boost

Trevor Reeve, Pentagon

Pentagon Group have “room for improvement” despite reporting profit before tax of just over £4 million on turnover of £472m, according to group chairman Trevor Reeve.

The group’s improved financial performance - reported in a statement issued ahead of Companies House publication - came in what had been a “difficult year” for newly-acquired franchises in Lincoln and the increased uncertainty in the economy after the EU referendum, the group said.

But Reeve stated: “These are really great results but I always feel there is room for improvement and we are constantly looking for ways to improve the way we do things.

“Our business has seen significant growth in recent years, and so over the past 12 months we’ve been focussing on strengthening our senior management team to reflect the increased scale of the business.”

The Derbyshire-based group reported new retail and local business sales which had increased 6% from 23,917 units in 2015 to 25,331 in 2016, with 3,301 sales from the first full year of trading at new dealerships in Lincoln and Doncaster.

Fleet department profitability also rose, it said, with volume increasing slightly to 17,460 units thanks to an improved vehicle mix now that there are more manufacturers represented by the group.

Used vehicle performance improved, with dealerships retailing 12,250 used cars and vans, an increase of 15% on 2015.

New and used car finance performance improved again, with overall revenue from finance and insurance products growing by 15%.

Revenues in aftersales  and parts departments saw improvements, with service and bodyshop turnover up by 16%, and a 13% increase in gross profit across both departments, the group's statement said.

Parts yielded a turnover increase of 28% over the year, helped by improved online parts sales which grew by 23%. Gross profit from Parts departments increased by 22% overall.

Pentagon was also celebrating impressive staff retention, with 41% of team members have now been with the business for five years or more. Pentagon now employ over 1,250 team members across 39 franchise points and head office locations and changes have been made in senior areas.

Reeve said: “We were especially pleased to be able to promote Cathy Smith to the role of finance director in 2016 and, with her experience and in-depth knowledge of this business, I know she is the right person to help us realise our ambitions and drive our future growth strategy.”

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