Pendragon has delivered a optimistic set of buying and selling outcomes revealing pre-tax income rising 10.6% to £36.4 million within the six months to June 30.

The proprietor of the Stratstone, Evans Halshaw and Automobile Retailer manufacturers mentioned like-for-like revenues elevated 15% in a powerful first half, which it mentioned got here “regardless of what stay difficult financial situations, with strain from increased rates of interest and ongoing elevated ranges of value inflation”.

Invoice Berman, Pendragon chief govt, famous that first half income and income had been up throughout all divisions regardless of these buying and selling challenges with its automobile retailers managing to ship robust quantity development for each new and used automobiles in the course of the interval. Automobile retailing total delivered a 13.3% development in income and a rise of 23.7% in underlying working revenue. 

Whereas the general new automobile market continues to be nicely beneath pre-pandemic ranges, Pendragon mentioned it had seen an enchancment in provide in the course of the first half because the market grew total by 18.4%.

Pendragon noticed gross sales of latest automobiles improve 18.3%, consistent with the whole market and nicely forward of the retail market. Along with the brand new automobile quantity development new automobile gross revenue per unit of £2,779, was up 7.9% or £203 in comparison with the primary half of 2022, with the mixed influence of each quantity and margin will increase leading to a 25.2% improve in new automobile gross revenue.

Pendragon mentioned that it was about to launch a flagship showroom in London’s Mayfair following the launch of its partnership with BYD forward of the debut of Chinese language producer’s second mannequin within the UK.

“Whereas model consciousness stays low, we anticipate that this can proceed to develop as new merchandise are launched and BYD improve their model advertising over time,” mentioned Pendragon which additionally famous its new partnership with Genesis, throughout north-east and central England the place the primary Genesis showrooms are anticipated within the first quarter of 2024.

It reported that used automobile provide stays tight, with the knock-on influence of how manufacturing ranges for the reason that pandemic leading to fewer almost new automobiles. Regardless of this, adjustments it made in 2022 continued to underpin Pendragon’s efficiency, with used automobile volumes up 7.2% in opposition to market development of 4.1%. 

Aftersales income grew within the interval, up by 8.7% – a rise of 18.6% on a like-for-like foundation – with additional enchancment within the gross margin of 20bps to 51.5% in opposition to first half 2022 margin of 51.3%.

Berman mentioned Pendragon had continued to make progress with its technique to enhance efficiency and unlock worth throughout its automobile retailers via accelerating huge information digital innovation, driving operational excellence and embedding constant finest apply, supported by a lean and environment friendly value base.

Through the second half of 2023 Pendragon mentioned it might roll out a brand new rate-for-risk finance mannequin to offer extra enticing bespoke finance propositions tailor-made to particular person credit score profiles along with focused buyer communications utilizing information analytic instruments.

“We’re persevering with to increase the potential alternative that may be harnessed via information science and machine studying,” the enterprise mentioned, including, “and we’re presently trialling the optimisation of pricing on a localised geographic foundation utilizing market traits for particular person automobiles and shopper shopping for behaviours.” 

Pendragon had mentioned final week that it might promote its UK motor and leasing companies to US motor group Lithia Motors for £250 million, valuing Pendragon at 27.4p a share. A shareholder assembly on October 6 is already scheduled on this deal which plans to promote all its motor companies to Lithia and go away Pendragon’s Pinewood software program enterprise as a standalone, persevering with publicly-listed firm. Two new bidder teams have since emerged.

Reporting on the primary half efficiency of the Pinewood software program enterprise, Pendragon famous that 90% of Pinewood’s revenues are derived on a recurring foundation.

“While Pendragon stays an essential buyer to Pinewood, as Pinewood has grown, Pendragon’s proportion of the Pinewood whole person base has been diluted to round 17% with intra-group charging maintained at a aggressive market price.”

Through the first half of the yr, person numbers elevated by 7% in comparison with the identical interval final yr, ending the primary six months with over 32,800 customers.  

Internationally, there was a 12% improve in common person numbers at 6,500.  “All worldwide markets grew person numbers, with Pinewood benefiting from the launches in Singapore and the Center East on the finish of 2022,” it mentioned.  Pinewood mentioned it’s now additionally getting ready to launch within the Japanese market.

“There has additionally been good additional progress when it comes to OEM help at a global degree,” it mentioned. ”Pinewood continues to construct a powerful partnership with Volkswagen and Porsche, which has enabled constructive dialogue with giant worldwide supplier teams in each the European and Asia Pacific markets.”

Leasing enterprise Pendragon Car Administration in the meantime reported elevated income in comparison with the identical time final yr which was generated by a small improve in gross sales values together with increased income briefly time period rent.

“Revenue on disposal per unit stays at increased ranges in contrast with pre-pandemic comparators as used automobile costs have remained at elevated ranges, with disposals within the half nonetheless primarily based on residual values set earlier than these worth will increase occurred,” Pendragon mentioned.

“That is underpinned by the continued scarcity of top quality used automobiles. There’s elevated demand for brand spanking new automobile leases within the company sector and regardless of new automobile lease deliveries growing by 23% within the first half in comparison with the primary half of 2022, the extent of automobiles on order for our clients stays at increased than regular ranges, with over 2,000 orders excellent.”

Producer provide constraints easing barely on automobile provide has resulted in new automobile supply lead occasions lowering in comparison with lead occasions in 2022.

Pendragon’s Berman mentioned driving operational excellence and finest apply will proceed to be a key administration focus with efficiency measures and peer benchmarking utilized on an actual time foundation throughout the division, serving to to drive efficiency. 

“We stay conscious of the potential influence that exterior pressures might have on shopper sentiment and disposal incomes, nevertheless we stay assured within the group’s capability to proceed to construct on our strategic progress within the second half,” he mentioned.