Pendragon 'retrenchment' sees profits more than double

PENDRAGON, the company behind the Evans Halshaw and Stratstone car dealerships, more than doubled underlying profits last year but reduced its headcount by more than 650 staff.

The Nottingham-headquartered group closed or sold 25 franchises in 2010 and yesterday said it would continue to review its 245 remaining franchises.

The company is the UK's largest independent operator of franchised car dealerships and has a string of showrooms in Scotland, many gained following its 2006 acquisition of Reg Vardy.

It posted underlying pre-tax profits of 25.2 million in the year to 31 December, compared to 10.1m in 2009, on revenues of 3.6 billion, up from 3.2bn the previous year. The group, which also runs a small number of franchises in California, said the reduction in jobs and franchises formed a strategy of "right sizing" the business. Trevor Finn, Pendragon's chief executive, said: "The results of our used car operations have been particularly pleasing with out-performance against the market.

"While the group performed well in 2010, what's more pleasing is to see that momentum carried forward into January, and we look forward to it continuing during 2011."

Both used and new car revenues were up, as was the firm's wholesale business. But after-sales revenues, which include parts and maintenance, dipped from 391.3m in 2009 to 354.7m last year.

The company said after-sales were being affected by the reducing number of vehicles under three years old.

The growth in profits was driven by a strong performance from its volume car retailer Evans Halshaw as well as its prestige arm Stratstone. Shares in the company were unchanged at 23.5p yesterday.