Pendragon’s second-quarter car sales were up 32% on the year – its best performance in eight years – as it shrugged off a continuing shortage of new cars in the UK.
The car dealer’s figures came as it reported a 29% increase in revenues over the third quarter, which was its best performance in nine years, with sales in its UK car business up 19% year on year to 643,000.
Jonathan Hayes, the chief executive, said: “We remain on track to deliver another year of strong top-line growth, leading to our best group trading profit since the peak of 2008.”
Pendragon, which operates 113 dealerships across the UK, said gross profit from new cars had climbed as it sold more versions of last year’s models.
Hayes said it was not unusual to see lower new car sales in the run up to Christmas, due to consumers holding off and buying new or leased cars in the hope of a sales boost. In 2017, he said, they were facing the opposite problem with customers potentially avoiding new car dealers altogether in a bid to secure a lease deal and upgrade a car before the new year.
“Retail has never been more important for us and we have a lot of trade-up activity going on now [in] people saying that you should trade-in before you buy something new.”
He added that while retailers were having to provide deals on new cars in response to customers’ demands, it was still a “clearly a new car business, not a used car business”.
Pendragon – which also sells technology, furniture and insurance to customers through its Dealers network – said operating profit before tax and non-recurring items in the three months to 31 October totalled £30.2m, which exceeded analysts’ expectations of £26.3m.
Revenues at the group rose 25% to £912.2m.
Clive Black, an analyst at Shore Capital, described the increase in revenues as “phenomenal”, but said it did not signal any imminent change in the overall performance of the company.
He said: “Overall the group continues to meet or beat all the performance metrics we would typically expect to see as strongly performing retail businesses grow stronger.”