Pendragon, the UK’s largest car dealership group, has revealed a 24% increase in profits for 2003, despite a slight decrease in its turnover. The group will shortly formalise the acquisition of its rival CD Bramall, giving it a leading market position from which to profit under the new Block Exemption rules.
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Pendragon announced the £230 million deal to acquire its rival CD Bramall last January, and has followed this up by reporting a £38.2 million profit in 2003, as a result of strong demand for new and used cars in the UK.
The company has a network of 117 car dealerships across the country, representing specialist and luxury car manufacturers including Aston Martin, BMW and Ferrari.
In the UK, the company performed strongly in 2003 due to the strong growth in car registration for brands such as BMW, Mini and Porsche. However, in the German and US markets, where the group represents Land Rover and Jaguar, the results were very disappointing. In these countries new car registrations fell 0.5% and 2.5% respectively against 2002.
In the coming year, Pendragon is looking to increase the size of its UK sales operation for a number of manufacturers including Ford, Vauxhall and BMW. It will also boost its geographical spread with more sites in Scotland and the southwest.
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By GlobalDataThe acquisition of CD Bramall will provide the combined group with significant economies of scale by allowing its dealers to sell any marque the group represents. This will enable Pendragon to take full advantage of the new Block Exemption rules, which aim to reduce the control that manufacturers exert over the vehicle retail market.
National new car registrations in January went up by 5.8% on last year, giving the group a strong start. But it is too early to forecast any profits for the expanded Pendragon group so soon after the acquisition. However, as the company showed with its takeover of similarly sized rival Evans Halshaw in 1999, Pendragon can integrate two major groups and rapidly deliver positive results. The company is seemingly set for further success, especially if it maximises its size to exploit the new Block Exemption legislation.
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