18th Feb 2014 10:50
LONDON (Alliance News) - Motor retailer Pendragon PLC Tuesday reported higher profits and revenues for 2013, as it benefited from the continued strength of the UK car market, and predicted it would also meet market expectations for further growth in 2014.
The UK car market rose strongly in 2013, outperforming other European markets, and also the recovery in the UK economy. Anecdotal evidence suggested that consumers were spending windfalls like bank repayments for mis-sold policies on bigger-ticket items like new cars.
The Society of Motor Manufacturers and Traders last month said that 2.26 million vehicles were registered in the UK in 2013, up 10.8% from 2012. However, the market is still 6% below the 2.4 million vehicles registered in 2007.
In a statement, Pendragon said it had seen strength in sales of new and used cars, as well as the aftersales servicing that makes it most of its money.
It reported a pretax profit of GBP38.9 million for 2013, up from GBP34.0 million in 2012, as revenues rose to GBP3.85 billion, from GBP3.64 billion.
The seller of car brands including Ford and Vauxhall through to premium brands like Maserati and mercedes-Benz, returned to paying a dividend during the year. It is proposing a final dividend of 0.3 pence, after paying a 0.1p interim dividend.
Retail sales in its aftersales business were up 3% in the second half of the year, while volumes of used cars rose 7% on a like-for-like basis for the year as a whole, and new car sales rose 18% on the same basis.
Chief Executive Trevor Finn said the new car market was still being driven mainly by private individual buyers. Fleet buyers were renewing their fleets, but not expanding them , he said.
He said the economic crisis had driven a change in consumer car buying habits, and financing, much of its now provided by the car companies, was a key factor. Consumers will look at the level of monthly payments they will need to make when buying a car, rather than just considering the overall price of a vehicle, he said.
Finn, also noted how important a good online service is becoming in the industry, particularly for sellers of used cars. Pendragon said online visitors to its Evanshalshaw.com, Stratstone.com and Quicks.co.uk sites grew 22% to 13.3 million in 2013.
Still, Pendragon shares were down 6.3% at 32.1 pence Tuesday morning, even though the company's underlying pretax profit of GBP44.2 million was in line with consensus expectations. Analysts are currently forecasting a pretax profit of GBP47.50 million for 2014.
"We are confident that 2014 will be another year of good performance, with Group performance in line with expectations for the year," Finn said in the statement.
By Steve McGrath; [email protected]; @SteveMcGrath1
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