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Pendragon Vehicle Management, the fleet division of the UK's largest dealer group, has seen its operating margin halve in the past year.
The firm's latest financial figures show that while turnover has increased to £34.2m in 2015, up 54% from £22.2m in 2014, the division's operating profit has fallen from £5.6m to £4.1m. This has resulted in an operating margin of just 12% in 2015 compared with 25.2% in 2014.
The figures show Pendragon Vehicle Management's poor first half figures impacted on the year-end results. After these figures, Neal Francis, the firm's managing director, said the results were "purely a matter of timing" and blamed long delivery times on new cars, which in turn pushed disposal income into the second half of the year.
"We have a very loyal customer base and a good order bank for the second half of the year. A significant proportion of our revenue is derived from returned vehicles," he said.
"This half year has only seen rental income not the expected disposal income as customers extend their contracts waiting for the exact new cars they want."
Commenting on the full-year results, a senior source within Pendragon said the second half figure showed that not only was there a rise in turnover and fleet size, but also in the profitability, compared with the second half of 2014. He added the 2016 first half figures would show a clear improvement over 2015.
The company currently sits at number 17 in the BC50 listing, issued in 2015, with almost 14,500 vehicles, up approximately 1000 from the year before.
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