Pendragon profits lifted by acquisition

UK car dealership Pendragon posted a 71% rise in half-year profits today after benefiting from its business-transforming takeover of rival CD Bramall in March.

The Nottingham-based group – the UK’s largest car dealership – said the integration of the £230m (€348.4m) acquisition was going to plan while existing franchises, including Vauxhall and Ford, were performing well.

Unveiling results for the six months to June 30, Pendragon said bottom-line profits rose to £40.6m (€61.5m), while turnover increased to £1.6bn (€2.4bn) from £948m (€1.4bn) – including £669m (€1bn) from CD Bramall.

Pendragon increased its presence in the luxury market, as well as the size of its sales operation for Ford, Vauxhall, Mercedes-Benz and BMW, through the purchase of CD Bramall.

It also expanded its coverage in Scotland and the south-west of England, leaving Pendragon with 257 sites and 11,500 staff.

Demand in the UK was “stable”, with the company selling 1.4 million new cars in the first six months, a small increase on last year. This left the company on track to match last year’s total of 2.6 million new vehicle sales.

On a like-for-like basis, turnover from the existing Pendragon dealerships was 8.5% higher at £62.6m (€94.8m), while underlying operating profits increased by nearly 10%.

Since the acquisition, CD Bramall operations have been reorganised and integrated into Pendragon. Functions such as payroll, group accounts and property management have been transferred to its Nottingham headquarters.

The company disposed of four businesses, including three CD Bramall dealerships.

Chief executive Trevor Finn said: “Following the acquisition of CD Bramall at the beginning of March this year, we have maintained our focus on the group’s profitability to produce an excellent set of results.

Mr Finn said trading continued to be good and he was confident the group would continue to build on the success achieved so far.

As well as its UK business, it operates in the United States and represents Land Rover and Jaguar in Germany.

Profitability at the US operation improved, although there was a fall in profits and turnover in Germany, where the economy showed little sign of recovery.

The interim dividend was raised by 10.5% to 4.2p (6.4c). Shares dipped 7.5p to 315.5p today.