Still got gas in the tank.
The market for new cars has in the UK has still not peaked after registrations hit a 12-year high last month, according to the country’s largest car dealership
Car registrations are often viewed as a leading indicator of consumer confidence and the wider economy, and the Society of Motor Manufacturers and Traders has predicted a 5 per cent decline in sales in 2017 after years of strong growth.
However, Pendragon said today it is confident that easy access to consumer finance will prevent any short-term declines in the market, despite the company’s own new car sales slipping 1.4 per cent in 2016.
The prediction came as the company, which operates the Evans Halshaw and Stratstone brands, reported a 1.9 per cent increase in full-year revenues, driven by stronger growth in its used and aftersales businesses.
Statutory profit before tax was 7.6 per cent lower than the previous year at £79m, though last year’s figure had been boosted by the £23.8m disposal of Pendragon’s investment in a subsidiary property company. Underlying profits grew by 7.6 per cent, to £75.4m.
The company said it expects results for 2017 to be in line with expectations, with “marginal” gains for its new cars business helped by double digit growth in used car sales.
Pendragon’s shares had a bumpy 2016, both entering and leaving the FTSE 250 index in the course of the year. They have yet to recover to the levels seen before the EU referendum in June, but came within touching distance at the start of trading on Tuesday, climbing as much as 7 per cent to 37p.