Pendragon goes into reverse

By SARAH MARKS FOR MAILONLINE
Updated:

 

Pendragon, Britain's biggest car dealer, said it would start importing cars from the Continent as it admitted continued uncertainty about pricing had hit trading over the summer.

Pre-tax profits for the six months ended 30 June were 14% down at £10.5m. Chief executive Trevor Finn said: 'It's been a tricky market with the pricing, but in spite of that we have maintained margins.'

He unveiled a series of initiatives to rev up the business including bringing over cheaper makes of certain cars which Pendragon does not distribute in Britain, such as Peugeot, Renault and Nissan, from Europe.

Unlike similar initiatives from competitors, Finn said Pendragon would not merely order a car for customers but buy in bulk and park them on the forecourt.

He is also negotiating to securitise most of the company's £120m property portfolio, freeing cash to invest in more dealerships. This, he reckoned, should give a return on capital of 18% compared with a only 8% on property.

Disposals amounting to £50m following the acquisition of the Lex dealerships have helped reduce gearing to 97%. Sales fell by 23% to £763.7m while adjusted earnings per share were down 15% at 13p. The dividend is up 11% to 4.9p.

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