| Used cars and aftersales continue to drive profits
SALES of used cars as well as money it makes looking after them continued to drive profits growth at Notts-based car dealer giant Pendragon. The firm, which owns the Evansalshaw, Stratstone and Quicks garage chains, saw its underlying sales revenues reach £3.418 billion in the year to the end of December - down more than £100 million on the year before. But its pre-tax profits more than doubled to £24 million as it benefited from a big leap in used car sales and increasing amounts of aftersales work - where its gross profit margins are nudging 60 per cent. Pendragon is headquartered at the Sherwood Business park at Annesley, but has dealerships across the country. Through Evansalshaw, it sells new cars for mainstream manufacturers like Vauxhall and Peugeot, while its Stratstone dealerships sell prestige brands such as Jaguar and Land Rover. Pendragon said used vehicle sales rose 14 per cent despite the overall market being flat as it focused on offering value. It was helped by the expansion of its Quicks second-hand car supermarket trial, which sells a variety of cars under a price match guarantee and appeals in particular to women on account of its high levels of customer service. The venture launched in 2010 and now has seven units after opening three during the year, selling more cars per site than its Evansalshaw division. With increased use of social networking sites and mobile phone apps, Pendragon reported a 49 per cent increase in visits to its Evansalshaw and Stratstone sites since 2009. The websites offer free valuations on part-exchanges and play a key role in attracting clients onto its forecourts. Trevor Finn, Pendragon's long-serving chief executive, said: "Strong progress has been made by the group in 2011 despite the turbulent economic conditions. "The used sector has been a key performance highlight for the group for the year. "This will remain our key strategic area of focus and we expect this momentum to continue during 2012. "Aftersales is still impacted by the reduced market opportunity in the less than three year old vehicles group, but we will continue to roll out our aftersales initiatives to aid our performance." Mr Finn said he expected sales of new upmarket cars to do well this year, with sales of new mainstream cars continuing to be difficult for at least the first half of the year. e said: "We again expect the new prestige sector to perform well in 2012 with the new volume retail sector being more adversely impacted by economic conditions, at least in the first half of 2012. "Given our recent performance, strong cost control, lower finance costs and clear strategic goals we expect to maintain our momentum into 2012." During 2011, Pendragon's finances were bolstered by the sale of all in addition shares in a rights issue, which raised £70 million, a whole new deal with its banks which cut borrowing costs, and a pension deficit reduction plan. |
Friday 24 February 2012
Used cars and aftersales continue to drive profits
