Pendragon slashes divi as profits tumble

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Date: Thursday 28 Aug 2008

LONDON (ShareCast) - Car retailer Pendragon has slashed its dividend by three quarters as a slump in new and used car sales helped chop pre-tax profit by over a third in the first half.

Buyers turned their backs on large executive and off road vehicles in June, causing the biggest single monthly drop in wholesale used car prices for more than five years.

Private sector registrations tumbled almost 12% in June, taking the total decline for the six months ended 30 June to 4.9%. National UK new car registrations overall dropped 1.6%.

“These market conditions are causing volume and margin pressure,” said the firm. “In addition, like most other companies in the UK, we have been affected by rising costs which we have already taken action to mitigate.”

Profit before tax fell to £21.1m from £35.5m a year ago on revenue down to £2.48bn from £2.7bn. Profit before tax and exceptional items fell to £13.4m from £32.7m.

The company, which said it has undertaken cost reductions through targeted dealership closures and redundancies, also dropped the dividend to 0.5p from 2p this time last year.

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