Pendragon delivers 'another strong performance' in H1

(Sharecast News) - Automotive retailer Pendragon delivered "another strong performance" in the first half of 2022, with the group now expecting to report interim underlying pre-tax profits of roughly £33.0m. Pendragon said on Wednesday that new vehicle volume continued to be impacted by supply constraints, with the wider market down 11.9% during the first half of the year, forcing the company to continue to focus on maximising margins on every unit and strengthen its "already robust" order bank. New gross profit per unit was said to be higher year-on-year and have "more than outperformed" volume shortfalls.

Used vehicle volumes were also down year-on-year as supply constraints from lower new car production continued to have a knock-on impact on used car availability. Used gross profit per unit was also said to have remained strong, while aftersales revenue and profitability were both higher than the prior year.

The London-listed group added that an increase in UK Motor gross profits, combined with a "strong performance" in its leasing business, were offset by increased underlying operating costs of approximately £20.0m. However, Pendragon added that cost pressures were partially offset by its ongoing focus on cost-saving opportunities.

"We are pleased with the strong start to FY22 and remain confident we have the right strategy in place. We are mindful of the challenges to both new and used vehicle supply which are expected to continue for at least the remainder of the current financial year. Softening consumer sentiment also has the potential to impact on demand in the second half," said Pendragon.

"However, we believe our market-leading proposition and mix of business models means we remain resilient in the face of these challenges and we continue to expect to deliver group underlying profit before tax in line with board expectations."

As of 0840 BST, Pendragon shares were up 2.87% at 21.50p.

Reporting by Iain Gilbert at Sharecast.com