Executive rise lifts Pendragon

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Pendragon, the dealership specialising in luxury cars such as BMW and Jaguar, unveiled results suggesting that recovery from recession is stronger among company executives than private buyers.

The group, announcing a 30 per cent jump in taxable profits to £9.62m, said: "In particular, demand for executive and luxury products exhibited strong growth through to the end of the year when most sectors of the UK market experienced a slowing in the rate of growth throughout the year."

Trevor Finn, chief executive, said company executives, chary about changing their cars in the depths of the recession, felt more inclined in the slipstream of corporate recovery.

While Pendragon's profits from used car sales rose only 4 per cent to £4.3m, profits from new car sales soared 41 per cent to £16.4m.

Mr Finn said the flatness of the used car performance reflected greater demand for new cars generated by manufacturers' new model ranges.

The European Union luxury division's profits rose 13 per cent to £33.1m, with sales of BMW, Jaguar, Land Rover and Mercedes-Benz increasing by 29 per cent against a national figure of 18 per cent.

Mr Finn added that national registrations of Volvo dropped 5 per cent during the year, but Pendragon was able to increase registrations by 6 per cent, with profitability remaining constant.

Both the after-sales and contract hire operations also increased their profits. After-sales profits jumped 24 per cent and contract hire 60 per cent. During 1994 the number of vehicles under contract hire rose by about 300 to 6,800.

Earnings per share rose 23 per cent to 17.3p, and a final dividend of 5.4p makes a total of 8.1p - up 12.5 per cent.

Mr Finn said many of Pendragon's newer dealerships had not reached maturity in local markets, "which means the full profit potential of the group has yet to be realised".

Pendragon's ratio of debts to shareholders' funds has increased to 25 per cent from 16 per cent, although the group said interest was covered 5.9 times.

The shares added 5p to close at 231p.