The £5bn turnover group reported an “encouraging performance” in the first quarter of the year and said new car net profits per unit grew faster during that period than the previous three quarters although volumes fell 4 per cent year-on-year. Used car sales, a priority for the firm, rose 2 per cent year-on-year as net profits per unit improved each month since October last year.

Pendragon's luxury division Stratstone also performed well as sales grew 2 per cent over the same period in 2007. But Evans Halshaw, its volume brand division, fared less well, recording a year-on-year decline of the same margin. Despite the worsening economic climate, Pendragon remains bullish in its outlook and said it was confident of a “satisfactory outcome” at the year's end. The group said: “It is still unclear how large an impact credit tightening and house price falls will have on retail markets for the remainder of the year. “However, the critical metrics of unit sales volumes and operating profits per unit are trending in a positive direction and the group is confident of a satisfactory outcome to the year at the upper end of expectations.”