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Pendragon Group raises profit expectations

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A trading statement from Pendragon (LON:PDG) reinforced the notion that Britain's car dealers are among the first to enjoy the fruits of an economic recovery.

The group raised full-year profit expectations after the second half of the year saw a continuation of the profit performance improvement seen in the first half.

The group said the improved performance is due to a combination of the strategic initiatives which it has embedded in the business, as well as improved market conditions.

The latter ties in with anecdotal evidence; digital marketing specialist dotDigital (LON:DOTD) recently revealed in an analysts' briefing that it is seeing a sharp increase in marketing activity from car dealers and estate agents.

Pendragon's shares were up 3.6% in mid-afternoon trading at 39.87p, having hit 41.75p earlier in the day.

Smaller rival Caffyns (LON:CFYN) was doing better still, up 9.2% at 474.9p.

Pendragon was not getting too carried away, however; it said: "Whilst the outlook to next year remains promising, we expect that after-sales recovery, driven by new car sales, will continue to be modest and the used car market will remain broadly flat."

Quick facts: Pendragon Group

Price: 9.93 GBX

LSE:PDG
Market: LSE
Market Cap: £136.9 m
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