Revenues hit the brakes at Pendragon
Strong activity in its after sales and used car divisions has helped vehicle dealership operator Pendragon achieve pre-tax profit of £17.7m, the company said this morning (23 August 2011). The Nottingham-based company said used car sales had helped offset a drop in turnover of nearly £60m.
Total revenue was down £59.8m for the six months to 30 June 2011 compared to the comparable 2010 period. It fell from £1.83bn to £1.77bn over the year.
Group like-for-like turnover increased by £3.5m. Used retail turnover was up 14.5 per cent.
Despite the significant turnover drop, underlying pre-tax profit was up 12.7 per cent on the company's comparable 2010 result.
In its six-month annual results, Pendragon said its recent recapitalisation through a £75.2m gross rights issue had been "successful". Chief executive Trevor Finn said the recapitalisation, which was announced on 14 July, would "provide greater strength and flexibility for the future".
Pendragon operates 237 franchised car dealerships, of which 9 are in California. It works under the brands of Stratstone (for prestige vehicles) and Evans Halshaw (for the volume brands).
The company said its Evans Halshaw division had made a strong recovery in the first half, but the performance of its Stratstone division was below 2010's results.
New product roll-outs of the Range Rover Evoque and Jaguar XF models in the second half of 2011 are expected to have a positive impact on the second half performance within the Stratstone division, said Pendragon.
Net borrowings were reduced to £294.9m over the six-month period, a reduction of £51.8m on its comparable 2010 result.
The company said its current pension deficit would be eliminated via a property-backed transaction that reduces cash outflow by an estimated £46m to December 2014.
Pendragon said the used vehicle market represented "a significant opportunity for growth", adding the market had shown further signs of recovery during the first quarter of 2011.
Finn said: "The improved financial results for the first six months to 30 June 2011 reflect the group's continued success of key operational initiatives in the aftersales and used car activities, strong cost control and operating efficiencies and a well-managed balance sheet.
"The success of our operational initiatives has again helped the Group's performance in its aftersales and used businesses despite a challenging macro-economic environment."
