Interim Management Statement

RNS Number : 0058D

Pendragon PLC

10 May 2012

 



Interim Management Statement

The AGM of Pendragon PLC will be held at 11.30am today.  The Chairman will report at the AGM the following Interim Management Statement by Pendragon PLC covering the period from 1 January 2012 to 9 May 2012.  Unless otherwise stated, figures quoted in this statement are for the three months ended 31 March 2012.

Summary

The Group is making good progress in quarter one and is in line with expectations.  The Group continues to significantly outperform in the Used car sector with double digit growth in the first quarter and is further benefiting from a lower interest charge in 2012 due to its lower debt profile.

Trading Update

Aftersales is our principal area of profitability in the Group.  In the first quarter of 2012, like for like service retail sales were maintained at last year's level.  Service retail sales is the core area of activity within aftersales and this result is encouraging given that the market opportunity in this area has decreased as a result of the reducing nearly new vehicle car parc.  The Group continues to implement and enhance its Vehicle Health Check programme which is driving this performance.  Like for like gross profit margin for aftersales improved again, by 70 basis points versus quarter one in 2011.

The Group's key area of growth continues to be in the Used car sector and we are delighted to report double digit growth for the first quarter.   Our like for like used volume growth of 11.4% continued to significantly outperform the national market volumes.  During the quarter used retail margin has been improving steadily since the start of the year.  Whilst used retail margin declined on a like for like basis by 90 basis points, this was against a strong comparator in the first quarter of 2011.  However due to the significant improvement in volume, like for like used retail gross profit again increased by a further 1.8%.  The key contributors to this performance are the on-going investment in our used car initiatives and our Stratstone.com and Evanshalshaw.com website growth.  Visits to our websites are up by 24% in the first quarter of 2012.

The new car sector is an important component of the Group's activities.  We continue to work together with our manufacturing partners to achieve the sales and customer goals that we both strive to achieve.  UK new car market registrations in quarter one were up by 0.9% whereas our performance was up 15.7% on a like for like basis.  For the brands we represent within Stratstone, national retail registrations increased by 7.2% in the quarter, whereas our new retail sales increased by 13.8%.  The Group has particularly benefited from new product activity from Range Rover Evoque, BMW 1-series and BMW 3-series.  For the brands we represent within Evans Halshaw, national retail registrations increased 5.9% in the quarter whereas our new retail sales increased by 3.1%.  We are pleased to report that new margin has been maintained in the period.

Our support businesses of Pinewood, Quickco and Leasing are continuing to perform in line with expectations and continue to provide a strategic advantage over our competitors.

Financial Update

The Group is operating at a lower average debt level in 2012, consequently we are pleased to report a £3m reduction in our interest costs as expected.  We are expecting Net Debt and our Debt : Underlying EBITDA ratio to be in line with expectations at the half year.  In the first quarter of this year we have sold empty surplus property with disposal proceeds of £3m and a further £10m of surplus property is under offer and in the process of disposal, the proceeds of which will be used to further reduce borrowings. 

Outlook

The Group continues to make good progress in its key strategic areas.  Used performance continues to be a significant growth area for the Group and is differentiating us from our peer Group.  We are encouraged by our aftersales performance despite the difficult market conditions and the new car sector has benefited from some key new product launches in the first quarter.  The Group is on track to continue the momentum from 2011 and quarter one and remains in line with expectations for the full year.

Enquiries:

Pendragon PLC	Trevor Finn, Chief Executive	Tel:	01623 725114
	Tim Holden, Finance Director
Finsbury	Philip Walters/Gordon Simpson	Tel:	0207 2513801

 

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