Pendragon Contracts has blamed a fall in operating profit for 2011 on the lower volume of profit on end of lease vehicle disposals as the fleet size has reduced.
The contract hire and leasing business generated an operating profit of £6.5 million compared to £7.5 million in 2010, while revenue stood at £38.1 million, compared to £44.9 million in 2010, with gross profit at £9.8 million, compared to £9.9 million in 2010.
The fleet size stood at 9,800 at 31 December 2011 compared to 10,100 at 31 December 2010. Pendragon said this trend is expected to continue in 2012, but then stabilise in future years.
Overall, Pendragon’s full year results showed Europe’s largest motor group achieve profit before tax of £24 million, an increase of £13 million from £11.0 million in 2010.
Meanwhile, net borrowings of £246.8 million reduced by £78.7 million compared to 31 December 2010.
Trevor Finn, chief executive, said: “Pendragon made good progress in 2011 despite turbulent economic conditions, achieving underlying profit before tax of £30.8 million, an increase of 22% over the prior year and over three times the underlying profit of 2009.
“The Group has benefited from strong focus on maximising returns and the success of its self-help initiatives within its three key business sectors: aftersales, used and new.
“Encouragingly, used car performance continues to be a high point for the group and will remain a key strategic area in 2012.
“Our internet presence with Evanshalshaw.com and Stratstone.com is an important differentiator for Pendragon in the market and has driven our strong aftersales, used and new performance.
“The year ahead is set to be challenging, but given our recapitalised balance sheet, healthy cash generation, clear strategic goals and robust operational management we expect to maintain our momentum into 2012.”