Pendragon recovery continues

29th Apr 2010 16:14

The share price of car dealer Pendragon went into overdriveo n Thursday after the company said its retail sales growth outstripped the market.After sales activities remained the most profitable part of the business with profitability in this area improving by 3.9% in the first quarter from the corresponding period of 2009.Sales of used cars rose by 13.8% year on year with margins up by 11.8%, reflecting the company's views that the used car market in the UK will bounce back in 2010 while margins are tipped to remain stable."Excluding the additional volume from the scrappage scheme, retail registrations would have fallen slightly, by 1.5% in the quarter. Excluding scrappage our total retail sales were up 4.3%," the company noted. Sales recovery in its Stratstone premium business is looking 'V' shaped whereas the sales recovery at Evans Halshaw is more 'U' shaped. Retail sales excluding scrappage were up 10.6% in Stratstone and in Evans Halshaw were up 2.1%. The group remains cautiously optimistic about the rest of the year and anticipates that profitability for 2010 will be in line with expectations.