27th Nov 2007 13:12
Pendragon PLC27 November 2007 27 November 2007 No 579 Pendragon PLC ("Pendragon") Trading Update During the year we highlighted the very competitive new car market and thedeflationary effect on transaction prices of new cars. Whilst this has beenpositive on new car volumes, it has had a negative effect on used car margins asthe deflationary effect on new car prices also feeds into used car prices. Wehave been successful in maintaining activity levels in used car sales althoughthis has not compensated for the loss of margin. Used car margins have shown a positive trend over recent months but thisrecovery is too late to recoup lost profits from earlier this year.Additionally, we have experienced a drop in our California business due to USeconomic uncertainties and very recently serious bush fires in the southernCalifornia area. Consequently, we expect our operating profits for the Group tobe behind market expectations by £12 million this year. In considering the uncertain economic outlook we are being more cautious on theoutlook for next year and have reduced our expectations by £18 million. Notwithstanding the lower trading performance, we have retained strong controlover our balance sheet through good working capital disciplines and we expectborrowings to be in line with market expectations at the year end. It thereforeremains our intention to pay the final dividend of 2p and retain our progressivedividend policy going forwards. We plan to update the market by way of our normal pre close statement towardsthe end of December and to announce our 2007 full year results on 20th February2008. Enquiries:- Trevor Finn, Chief Executive - 01623 725114David Forsyth, Finance Director - 01623 725114Gordon Simpson Finsbury - 0207 251380127 November 2007 -ENDS- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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