The group behind the Evans Halshaw and Stratstone car dealerships says it has had a strong start to 2023 – despite the multi-million pound impact of higher interest rates.
Nottingham-based Pendragon said it made underlying pre-tax profits of £23 million in the first three months of the year – up a quarter on the same time last year. However it saw interest costs rose by £4.6 million – more than 50 per cent up year-on-year.
The number of new cars sold by the group was up 20 per cent on the prior year. By comparison the overall market saw sales go up less than 1 per cent. The group said gross profit for each new car sold was up almost 10 per cent at £2,696, as a result of fewer discounts and manufacturers focussing on higher margin models.
The number of used car sales was up 14 per cent with average gross profit per vehicle of £1,457 – some 17.7 per cent down on a year earlier when the market was at its peak. Profits from aftersales servicing were also up as was the group’s software division Pinewood.
Announcing an improved outlook the business said: “There are encouraging signs of improvement in production and supply of new vehicles, although used vehicle supply is expected to remain tight for the foreseeable future.”
Chief executive Bill Berman said: “I am delighted to report a very strong performance in the first quarter, which builds on the momentum we generated last year from the progress with our strategic and operational initiatives.
“We continued to trade strongly in UK Motor, across both new and used markets, and our performance shows the benefits of the strategy we have been pursuing in recent years. It is really encouraging to see all of the group's divisions in growth, particularly when considering the ongoing challenges in the external operating environment.
“We are seeing improving signs in the production and supply of new cars and we are focused on continuing to deliver for our customers and OEM [original equipment manufacturer] partners in the months ahead."
