Pendragon signals jump in first-half profits

by | Jul 20, 2023

(Sharecast News) – Car dealership Pendragon flagged “robust” interim trading on Thursday, although it sounded a more cautious note for the rest of the year.
The group – which owns the Evans Halshaw and Stratstone brands – said it expected to report a 9% increase in underlying profits in the six months to 30 June, to £36.5m.

In the UK motor division, volumes rose 18% on a like-for-like basis, while used volumes jumped 7% on the same basis.

Aftersales recorded gross profit growth of 14%, while software business Pinewood and leasing arm Pendragon Vehicle Management both saw profit growth of around 10%.

Pendragon said the strong performances had “more than offset” around £15m of cost pressures caused by high inflation and rising interest rates.

However, looking to the rest of the year, it noted: “There were encouraging signs of improvement in production and supply of new vehicles during the first half, although used vehicle supply is expected to remain tight for the foreseeable future.

“The board remains mindful of the influence that both high inflation and increased interest rates have on consumer sentiment, with the potential for these factors to impact demand in the second half.”

Bill Berman, chief executive, said: “Pendragon has continued to perform well, demonstrating the continued success of our strategy. Increased sales across all divisions and higher profitability more than offset cost pressures, resulting in a strong cash position.

“While we expect high inflation and interest rates to persist in the second half of the year, our resilient model means we are well placed to perform in line with the board’s expectations.”

Pendragon is due to report interim results on 29 September.

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