Pendragon continues recovery

22nd Oct 2010 12:28

Motor dealer Pendragon is growing faster than the market as its recovery continues in the third quarter of 2010. Excluding the effect of last year's scrappage scheme, Pendragon's new car sales were 30.1% higher in the three months to September 2010, compared with a 27.6% improvement in the market. Like-for-like used car sales were 7% ahead and margins stable. The market remains difficult but Pendragon is focusing on the areas where it can improve profitability and cash generation. Aftersales will be an important part of this. Year-on-year, third quarter aftersales margins improved by 70 basis points. Profits are expected to be in line with expectations. Panmure Gordon has set a target price of 30p a share, which would be 12 times forecast 2010 earnings.