8:09 am, July 20, 2023
Pendragon has said it expects to report profits up nine per cent for the first half of 2023, but warned inflation and high interest rates could impact the rest of the year.
A trading update issued to the London Stock Exchange this morning (July 20) said the company expects to report a circa nine per cent boost in underlying pre-tax profit for the first half of 2023 to around £36.5m, compared to £33.5m for H1 FY22.
Pendragon said its profit growth more than offset ‘the underlying pressures of interest rate rises and ongoing cost inflation’.
The company’s UK motor division – which comprises the Evans Halshaw, Stratstone and CarStore names – saw sales of new cars jump by 18.3 per cent like-for-like, which was underpinned by strong margins.
Gross profit per unit was around £200 higher year-on-year, the firm said.
Used cars were also very strong – up 7.2 per cent like-for-like.
Pendragon said used cars were helped by gross profit per unit ‘remaining well above historic levels’ at around £1,400 per unit.
Aftersales, meanwhile, was also strong and returned a like-for-like gross profit growth of around 14 per cent.
Pinewood – Pendragon’s dealer management software – and Pendragon Vehicle Management – its leasing business – also saw profits grow by 10 per cent.
The company caveated its strong first-half performance with the potential for inflation and high interest rates impacting demand in the second half.
Pendragon CEO Bill Berman 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 board expectations.’
