Stratstones Porsche Center in Wolverhampton
The company said that while there was still a shortage of new cars, it was less than expected in October and November.
Price increases and strong used vehicle sales also increased profits and offset supply problems with new vehicles.
Pendragon has Evans Halshaw dealerships in Shrewsbury, Stourbridge, Walsall, Worfield and Wolverhampton, and a Stratstone location in Wolverhampton.
The company said its fourth quarter, which was robust so far, means it now expects to see profits of around £ 80 million for the full year.
It had raised its underlying earnings forecast to £ 70million back in October, from an earlier range of £ 55million to £ 60million.
The 2021 profit will be a significant improvement over the £ 8.2million in 2020.
This is happening despite car dealerships being hit by long delays in new engine development due to a global shortage of microchips for vehicle electronics.
Manufacturers withdrew their shipments and orders for microchips after sales declined in the early stages of the pandemic.
Auto production has since picked up again as demand began to grow, but chipmakers couldn’t keep up, creating a global shortage.
This has had an impact on the demand and cost of used cars, with the latest official inflation data showing prices rose 27.4 percent between April and October.
Pendragon said: “While the shortage of new vehicles continues, customer demand and order backlog are higher than last year.
“Although demand outpaced supplies, the deficit in October and November was smaller than we expected and performance was supported by strong unit gross profit.
“We remain cautious about possible further disruptions from Covid-19 in our local markets as well as in our global supply chains. However, given our strong financial performance with only one month of the remaining fiscal year, we now expect the full adjusted Group profit before tax.” – 2020-21 year will amount to approximately £ 80 million. “
