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Reg Vardy puts Pendragon in top gear

By This Is Money
Updated: 04:08 EDT, 15 February 2007

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Worrying new car sales took the shine off a massive acceleration in profits at Pendragon, Britain's largest motor dealer.

Flattered by last year's £500m takeover of rival Reg Vardy, Pendragon, known throughout the country by its Stratstone and Evans Halshaw forecourts, cranked up 2006 pre-tax profits by more than 50% to £96m as sales broke the £5bn barrier. Its dividend is also getting into top gear with a 30% rise to 3.45p for the year.

But the figures reveal almost all the growth came from adding Vardy's 97 dealerships. Profits from Pendragon's pre-Vardy business showed a year-onyear rise of just 1.3%.

While much of Pendragon's profits come from the aftermarket, servicing previously-sold cars on a regular

basis, both its luxury and volume new car sales suffered in a tough 2006 market.

The UK luxury market saw new car sales decline by 1.2% in 2006, but Pendragon's luxury business, the 170-location Stratstone - best known in the capital for its swish Aston Martin and Jaguar showrooms on Park Lane - saw new sales fall by 2.8%. Second hand luxury car sales were flat.

At its 183 Evans Halshaw forecourts which specialise in Ford, Vauxhall, Nissan, Hyundai and CitroÎn, Peugeot and Renault, new registrations slumped 5.1% against a fall in new sales countrywide in the volume manufacturer sector of 3.8%.

Chief executive Trevor Finn said: 'The used car market was good and demand for nearly new used cars continued to be strong.'

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