Pendragon

Car dealership Pendragon felt the pinch of the new car pricing issue and also revealed that it would use funds from property disposed of last year to buy back its own shares. The board still claimed the full year performance was 'creditable' due to consumer confidence being at an all-time low. Preliminary figures to 31 December showed a dip in sales from £1.8bn to £1.43bn, with pre-tax profits slumping to £4.1m (£19.2m). Operating and other exceptional costs of £5.4m were charged, whereas the 1999 figure of £19.2m was arrived at after crediting £5.7m. Losses also hit home within the contract hire business because of a fall in used car residual values over the past year. Furthermore, an extra £3.4m of interest arose because Pendragon borrowed to make several acquisitive moves. In March the firm bought 32 dealerships and 4 bodycentres from Lex for £82.5m which enhanced its luxury and specialist car offering. Two Jaguar dealerships were acquired in Germany and Pendragon made inroads into the US through the 'Bauer Motors' purchase. On a more positive note, the group launched an internet sales operation, tins.co.uk, and also revealed a tie-up with Microsoft. Trading in December and January has been ahead of expectations and the board believes there are signs of consumer confidence returning.

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Sector: General Industrials

Companies: Pendragon

Market cap: £141.4m

PE Forecast: 7.8

Share price: 232p

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