Car retailer Pendragon has posted better-than-expected profits but said it is “mindful” of macroeconomic pressures on the automotive industry.

The company, which has sites across Scotland and trades under Evans Halshaw and Stratstone brands, posted underlying profit before tax of £57.6 million, which was behind the £83m from the previous year but still ahead of expectations.

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It said the “outperformance” was delivered despite a £10m headwind from £4m higher operating expenses, driven by greater levels of inflation, and £6m of increased interest costs driven by rate changes.

After non-underlying items the group reported profit before tax of £57.2m in its full year results for the financial year ended December 31, 2022, against £73.3m the year before.

The company launched CarStore.com, which is now its primary marketplace for all our used car inventory, listing 12,000 cars across brands.

READ MORE: Pendragon says new car shortages to persist 

Andy Chambers, director at Edison Group said its results reflected the challenges faced across the industry in the year, adding: “Trading has started well in full year 2023 although cost headwinds persist and vehicle supply issues are not fully resolved."

Bill Berman, Pendragon chief executive, said: "We delivered a resilient trading performance against a challenging backdrop last year.

"These results clearly demonstrate the strength of our operations, and it is all underpinned by the great strides we are making against our strategy which ensures we are well placed to meet the needs of our customers and OEM partners, and to create value for all of our stakeholders."

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He continued: "During the year we have continued to invest in strategic initiatives across the business that drive growth. We launched CarStore.com, which is now our primary marketplace for all our used car inventory.

"The platform lists approximately 12,000 cars across our brands, more than any of the new platforms that have entered the market since 2019 and the market outperformance of our used car division in the second half showed the benefits of our investment in CarStore.com.

"We also invested more than ever before in Pinewood to further maximise the benefit that our DMS technology brings both to our external customers and to our business, where it is powering improvements made across our portfolio.

"We further expanded our new car representation after being selected by BYD, the world's largest new energy vehicle manufacturer, to be a UK launch partner in 2023."

He said: "We finished full year 2022 with good momentum, and trading has been positive in the first two months of full year 2023.

"We remain mindful of the potential headwinds from challenging macro-economic conditions."

Shares in Pendragon closed down 0.5p, or three per cent, at 16.3p.