Britain’s Pendragon Plc reportedly said on Thursday it would go back on the acquisitions trail after the purchase of a rival early last year helped the UK’s biggest car dealer group post a 47% rise in 2004 profit.

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The specialist in prestige and luxury cars told Reuters it accounted for only about 3% of the [2.2 million-unit] UK car market despite being twice the size of its nearest rival, giving it scope for further involvement in market consolidation.


However, chief executive Trevor Finn also told the news agency that any acquisition would depend on Pendragon cutting debt levels, built up by its January 2003 purchase of rival CD Bramall for £230 million ($US434 million).


“The plan is to reduce our borrowing and get back into a position where we can continue to acquire … The fact that the car market is not going to be booming puts pressure on some of the smaller operators to consolidate,” he said, according to the report.


Reuters said the purchase of CD Bramall helped Pendragon nearly double the size of its UK business, strengthening its position with premium brands such as Jaguar, Land Rover, BMW and Mercedes.

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The acquisition also helped boost it to a pre-tax profit of £65 million in 2004, up from £44 million a year earlier, on sales that increased to £3.2 billion from £1.8 billion, the report said, adding that Pendragon raised its total dividend for the year by 34% to 10.2 pence.


The company is the largest distributor of Harley Davidson motorbikes outside the US and the sole seller of Cadillacs in Britain, according to Reuters.


Pendragon reportedly said that, although industry analysts had forecast a slight dip in new car registrations in the UK for 2005, it was confident about reducing debt levels.


Finn told Reuters he expected the UK car market to have a challenging first quarter, hit by weak retail demand amid strong fleet sales.


“And then statistically we’ll be running at similar levels to 2004,” he told the news agency, adding that Pendragon would have 12 months of Bramall’s trading this year compared with 10 months in the previous year.


The company reportedly said the after-sales service and parts market, which accounts for some 50% of its gross profit, was likely to remain robust.