DEMAND for new and used cars is motoring ahead this year, dealership Pendragon has said as it revealed that its profits have almost doubled.
The owner of the Evans Halshaw, Chatfields and Stratstone dealerships posted profits of £33.2 million for the first six months of 2014, on revenues 2.7 per cent higher than the same period last year at £2.07 billion.
More than 139,000 cars rolled off Pendragon forecourts in the six months to the end of June, up 0.8 per cent on the same period last year and the firm's best first-half performance since 2008.
Investment in online sales is paying off, the Nottingham-based firm said yesterday, as visits to its websites rose 16.2 per cent on the same time last year to 8 million. Pendragon's gross margins rose 0.3 percentage points to 12.9 per cent, helped by higher sale prices on both new and used cars.
Aftersales, with gross margins of about 60 per cent, brought in revenues of £153.1 million in the six-month period, down £1.7 million on a year ago, though the firm said it saw plenty of space to grow in this area. Pendragon has managed to cut its net debt to £105.7 million or 0.8 times earnings, saving £1.4 million in interest payments and putting the firm ahead of its own targets on debt reduction.
"The balance sheet, combined with our strong cash flow, now gives us the flexibility to invest in our national footprint," said chief executive Trevor Finn.
"We are increasingly confident that we are positioning Pendragon for the future."
Pendragon expects to trade "comfortably in line with expectations" for the rest of the year. The group hiked its interim dividend from 0.1p to 0.3p per share.
Analysts at Jefferies, the firm's house broker, said the earnings were 11 per cent higher than their forecasts.