LONDON (ShareCast) - Car retailer Pendragon said pre-tax profits for the year to December 31st, 2013 rose 14 per cent to 38.9m pounds driven by a strong performance in the used, after-sales and new segments.

Revenue was up to £3.8bn from £3.6bn in 2012 and the total dividend was increased to 0.4p – an increase of 300%.

New UK retail sales were up 17.2% to 724,000 units and the group also reported strong demand in California, where it has nine franchises selling the Aston Martin, Jaguar and Land Rover brands.

Chief Executive Trevor Finn said the group was “very encouraged” by its second half performance in after-sales, which proved that the number of vehicles less than three years old on the road is beginning to rise as consumer confidence started to return.

“The group is in a strong position with its leading UK retail business, strong balance sheet and continued delivery of our strategy in the used vehicle sector," he said.

Finn said Pendragon was continuing to build on its three websites as a way to drive sales, adding that traffic to the sites was up 22% to 13.3m visits.

Net debt was cut by 35% to £139.6m and Pendragon’s target debt-to-earnings before interest, tax, depreciation and amortisation ratio was now 1.2. Finn said the company had now adopted a target range of between 1.0 and 1.5.

“This has been set in the light of the group's expected ongoing cash flow generation and is designed to give the flexibility to maintain shareholder value growth by returning cash to shareholders, whilst at the same time allowing the group to assess and pursue appropriate expansion opportunities or otherwise continue with debt reduction,” he said.

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