Pendragon ticked off for reporting errors

published 7 August 2012

Shares in car dealer Pendragon fell today after the firm got a slap on the wrist from the UK's financial reporting watchdog.

The Financial Reporting Council (FRC) was concerned about Pendragon's presentation of cash flows from its contract hire vehicle operations in its full year 2011 figures.

It said that in figures reported today the company had rectified the problem.

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"As a result of the...correction, cash inflow from operating activities originally reported as £83.9m was overstated by £31.3m," the FRC said.

"[It] should therefore, have been reported as £52.6m and net cash outflow from investing activities originally reported as £55.1m was overstated by £31.3m and should, therefore, have been reported as £23.8m in the 2011 accounts."

Shares in the firm fell 6.15% following the announcement.

Pendragon first half figures showed its new and used car sectors performed well over the six month period, with results across the group generally improving into the second quarter of 2012.

"Trading momentum in New and Used is expected to continue into the second half of the year and the group's current performance remains consistent with the board's expectations for the full year," said Chief Executive Trevor Finn.

"In line with earlier statements, it remains the board's intention that the company resumes paying dividends in relation to its 2012 financial year and onwards."

Revenues in the first half rose from £1.77bn to £1.91bn, while pre-tax profits were up to £19.1m, from £17.7m the year before.

Pendragon said it had outperformed the market with new and used vehicle sales, which were up 13.9% and 7.5% respectively, on a like-for-like basis.