Interim Results, etc

PENDRAGON PLC
13 September 1999


                        INTERIM RESULTS TO 30 JUNE 1999
                            JOINT VENTURE WITH FORD

Pendragon PLC, the UK's largest car dealership group today reports interim
results for the 6 months to 30 June 1999, and the formation of a joint venture
with Ford Motor Company Ltd.

Highlights:

*    Group turnover up 54% to £997.7 million (£645.9 million)
*    Headline profit before tax up 18% to £12.2 million (£10.4 million)
*    Net cash inflow from operating activities up sevenfold to £57.4 million
*    Dividend per share up 10% to 4.4 pence (4.0 pence)
*    Integration of Evans Halshaw successfully completed, £3million of
     duplicate costs removed
*    Launch of new joint venture with Ford will add valuable strategic input
     to Pendragon's operations.

Trevor Finn, Chief Executive, commented:

'September has started well in terms of new car sales, which when linked with
good July and August figures should enable us to achieve our expectations for
the year'.

'We remain at the forefront of an industry which is experiencing rapid change.
Our new joint venture with Ford, coupled with our twin track approach to the
market, and our focus on improving efficiency positions us well for the
future'.

Enquiries:

Pendragon PLC  Trevor Finn, Chief Executive                 Tel: [phone]
               David Forsyth, Finance Director

Finsbury       Rupert Younger                               Tel: [phone]
               Patrick Diamond


CHIEF EXECUTIVE'S REVIEW

Results and Dividend

Profit before tax for the six months ended 30th June 1999 increased by 18% to
£12.2 million compared to £10.4 million for the same period in 1998.  This is
after charging £3.6 million of exceptional costs, goodwill amortisation of
£1.1 million and £0.4 million of notional interest.  Included in the results
is £4.5 million of profit on the disposal of 10 non core motor vehicle
dealerships.  Earnings per ordinary share were 13.2p compared to 11.7p
reported in 1998, an increase of 13%.

The exceptional costs of £3.6 million are made up of £3.0 million relating to
the integration and reorganisation of the acquired Evans Halshaw Holdings plc
business and £0.6 million relating to one off project costs in respect of
relocating certain activities to our new customer service centre.

The Board has declared an interim dividend of 4.4p per ordinary share, a 10%
increase over the interim dividend of 4p in 1998.


Operations

Our franchise groups continue to benefit from brand-focused management.  In
this respect the performance of our Vauxhall Group has been particularly
pleasing.  The Mercedes-Benz Group has benefited from increases in market
share, and the BMW Group from the introduction of the new 3 Series.

There has been much speculation over the potential harmonisation of UK and
European car prices.  To limit our exposure to this, we took the decision to
reduce our inventory in the key areas where we believe harmonisation could be
detrimental to our business.  We therefore lowered prices of our new, used and
demonstrator models to decrease stocks and the impact of this has been reduced
profitability, particularly in our Ford, Fiat and Volvo Groups.  Having taken
this action, we are well prepared for the future and expect to see an
improvement in profitability in each of these three Groups in the second half.

In addition, we invested in our dealership network.  We have added five
further sites in the last 12 months in our Ford division.  These businesses
have not yet contributed profits above their funding costs.  We invested in
1998 in a further five Fiat sites within the M25 market area.  Following an
appraisal of the incremental sales improvements within the market area, we
have taken the decision to close three sites.  We now believe that we have the
optimal number of sites within this Fiat market area.

Jaguar profitability declined year on year as a result of customers awaiting
the launch of the new S-Type, which has since been well received.

The UK market new car registrations were up by 4.8% over the same period last
year.  We experienced strong demand in the specialist car market and we
achieved increased unit sales on a like-for-like basis.  Similarly, unit sales
in our volume businesses were up.  New car sales accounted for 34% of total
gross profit.

Nationally used car values have been affected by speculation over pricing
harmonisation, and as a result we have seen a like for like reduction in
profit in this area.  Used car sales accounted for 15% of total gross profit.

Aftersales continues to benefit from the healthy new car market.  We achieved
growth in sales and improved margins on a like for like basis in this area of
our business.  Aftersales accounted for 49% of total gross profit.

Our contract hire business has also been impacted by the less stable market
for used cars and has seen a decline in its performance over the last year.
The fleet has shown no growth, reflecting our conservative view on future
residual values.

We continue to look for ways in which we can improve the efficiency and
effectiveness of our business.  Following the completion of our Fiat project
in London we have focused on reducing costs by moving certain administrative
processes outside the market area to a lower cost location in Nottinghamshire.
This state of the art customer service centre provides a range of services,
including all back office services, to our Fiat Group.  Benefits include the
optimisation of economies of scale and the operational advantages of a single
back office function, aided by the greater use of advanced technology.  This
has been successfully achieved and will provide a template for further cost
reduction across the group.  An exceptional cost of £0.6 million is included
in the first half, which relates to redundancy and duplicate costs incurred to
date.  There will be a similar charge in the second half as we roll out
elements of the project to other parts of the group.


Business Development

In February we acquired Evans Halshaw Holdings plc.  Integration of the
dealerships acquired is now complete and the Evans Halshaw head office has
been closed and duplicate costs removed.  An exceptional cost of £3 million
was incurred in the first half mainly in redundancy payments to Evans Halshaw
employees.  As anticipated in the circular issued to shareholders in February
we are on course to make the savings of £3 million per year, the full effect
of which will come through next year.

The performance of the acquired dealerships was in line with the first half of
1998 which is a good result taking account of disruptions caused at these
sites during the integration process.  It was also stated in the circular to
shareholders at the time of the Evans Halshaw acquisition that selected
disposals would be made in order to reduce borrowings.  As part of this
exercise, in the first half of the year we have disposed of ten dealerships,
primarily VW and Honda, for £17.9 million.  Profits on these disposals
amounted to £4.5 million.  A further four dealerships have been sold in August
which has raised an additional £9.5 million cash and realised a profit on sale
of £2.1 million.

We estimate that the annualised turnover and operating profit of non core
disposals completed by the end of August is £160 million and £4.5 million
respectively.

Proceeds from the remainder of non core disposals planned this year will be
reinvested in further increasing the scale of our relationships with our
chosen manufacturer partners.


Joint Venture with Ford

We are today announcing that we have reached agreement to sell 49% of the
ordinary shares of the subsidiary which holds our Ford franchises to the Ford
Motor Company Ltd for a cash consideration of £20 million.  The transaction is
due to complete on 1st October 1999 and the proceeds will be utilised to
reduce the Group's borrowings.  The net assets of the subsidiary are £40
million.  Our freehold and long leasehold properties occupied by the Ford
franchises do not form part of the assets of the subsidiary.  It is our
intention to put these properties on the market in the near future.  The 1998
turnover and operating profit relating to the assets sold was £436 million and
£4.8 million respectively.

The joint venture enables us to have strategic input to Ford's retail
processes.  By bringing together our Ford Franchise Group's operational
experience and Ford's strategic overview the new company will have two
principal goals.  Firstly, improving the customer's experience by implementing
the latest methods in customer handling and developing more customer-friendly
processes.  Secondly, improving investor returns to ensure that these provide
sufficient rewards to allow model Ford dealerships to be developed in terms of
people, premises and processes.

The joint venture does not affect our other franchise relationships with Ford,
namely Aston Martin, Jaguar, Mazda and Volvo.


Finance

Our key objective in the first half has been to reduce our borrowings
following the £92 million acquisition of Evans Halshaw.  Pro-forma borrowings
in the shareholders' circular were £160 million.  Through selected disposals
and more efficient working capital management we have reduced our borrowings
to £121.4 million which represents gearing of 88.3%.  Working capital has
decreased by £36.3 million since the beginning of the year due mainly to more
efficient stocking levels across the enlarged group.  Capital investment in
the first half was £9.2 million, compared to £5.8 million last year.  The last
payment in respect of the businesses bought from Lex Retail Group Limited in
1997 will be made in September and amounts to £12.7 million.

Interest payable, including manufacturer stocking interest, in the first half
was £6.6 million.  Excluding notional interest, this is covered 3.0 times by
profit on ordinary activities before interest.  Our business continues to be
well funded by medium and long term committed borrowing facilities and we will
continue to focus on reducing borrowings further in the second half through
completion of the disposals of non core dealerships, the proceeds from the
joint venture with Ford and maintaining tight working capital control.


Year 2000

The group has undertaken a thorough review of all its computer and ancillary
equipment to ensure year 2000 compliance.  The group's main external dealer
management systems are certified by their suppliers as being year 2000
compliant.  The costs of year 2000 compliance are not material to the group
and all remaining non compliant systems are scheduled to be upgraded well
before the year end.  Systems upgrade and retraining costs are written off to
the profit and loss account as incurred.


Current Trading and Prospects

The indications are that the system of two number plate changes is achieving
its principal goal, namely smoothing demand.

Monthly forecasting in this first year of the new system remains difficult.
September has started well in terms of new car sales, which when linked with a
good July and August and improving performances from Ford, Fiat, Jaguar and
Volvo, should enable us to achieve our expectations for the year.

The industry is changing, with further consolidation likely.  At the same time
our company is transforming into a more focused group with fewer, yet larger
manufacturer relationships.  We are also changing the way the car dealership
business operates.  Our twin track approach of operating market area
businesses and specialist boutique style dealerships affords us opportunities
to reduce costs and improve returns.

Our strengthened balance sheet, a motivated team and our strong manufacturer
relationships will allow us to remain at the forefront of the industry
changes.

Trevor Finn
Chief Executive
13 September 1999


Consolidated Profit and Loss Account

Interim Results
for the six months ended 30 June 1999

                         Unaudited 6 months to 30.6.99   Unaudited    Audited
                   Pre-exceptional  Exceptional    Total  6 Months  12 Months
                             Items        Items                 to         to
                                                           30.6.98   31.12.98
                              £000         £000     £000      £000       £000
------------------------------------------------------------------------------
Turnover                                                            
Existing operations        641,087            -  641,087   645,938  1,271,978
Acquisitions               356,651            -  356,651         -          -
------------------------------------------------------------------------------
                           997,738            -  997,738   645,938  1,271,978
------------------------------------------------------------------------------
Operating profit                                            
Existing operations          8,930         (624)   8,306    13,820     26,977
Acquisitions                 9,020       (3,003)   6,017         -          -
------------------------------------------------------------------------------
                            17,950       (3,627)  14,323    13,820     26,977
------------------------------------------------------------------------------
Profit on sale of 
dealerships                                        4,466         -         -
Loss on disposal of                                         
fixed assets                                           -         -      (239)
------------------------------------------------------------------------------
Profit on ordinary                                          
activities before
interest                                          18,789    13,820    26,738
Interest payable
(Note 7)                                          (6,557)   (3,446)   (8,075)
------------------------------------------------------------------------------
Profit on ordinary                                          
activities before                                 12,232    10,374    18,663
taxation

Taxation (Note 3)                                 (4,197)   (3,268)   (5,769)
------------------------------------------------------------------------------
Profit on ordinary                                          
activities after                                   8,035     7,106    12,894
taxation
                                                            
Dividends (Note 4)                                (2,638)   (2,439)   (7,316)
------------------------------------------------------------------------------
Retained profit for                                         
the period                                         5,397     4,667     5,578
------------------------------------------------------------------------------
                                                                  
Earnings per                                                        
ordinary share (Note 5)                             13.2p     11.7p     21.2p
Diluted earnings                                                    
per ordinary share (Note 5)                         13.1p     11.7p     21.1p
                                                                   
All amounts relate to continuing operations


Consolidated Balance Sheet

                                            Unaudited    Unaudited    Audited
                                              30.6.99      30.6.98   31.12.98
                                                 £000         £000       £000
------------------------------------------------------------------------------
Fixed assets                                              
Intangible assets                              21,186        3,188      5,606
Tangible assets                               183,647      104,813    108,877
Investments                                     1,500            -          -
------------------------------------------------------------------------------
                                              206,333      108,001    114,483
------------------------------------------------------------------------------
Current assets                                            
Stocks                                        150,491      112,911    123,674
Consignment vehicles                          108,951       78,139     84,206
Vehicles subject to repurchase 
agreements                                    111,607       84,783     84,349
Debtors                                       135,118       87,982     73,018
Cash at bank                                   13,007       16,599      1,150
------------------------------------------------------------------------------
                                              519,174      380,414    366,397
------------------------------------------------------------------------------
Creditors: amounts falling due                            
within one year
Unsecured loans                               (30,000)     (11,987)   (10,000)
Bank loans and overdrafts                      (1,268)      (4,618)    (2,963)
Consignment vehicle liabilities              (108,951)     (78,139)   (84,206)
Repurchase commitments                        (53,323)     (34,885)   (34,373)
Trade and other creditors                    (200,155)    (110,633)  (107,056)
Corporation tax                               (14,927)      (5,427)    (6,308)
Dividends payable                              (2,638)      (2,439)    (4,877)
Consideration payable to Lex                              
Retail Group Limited                          (12,516)     (11,599)   (12,127)
------------------------------------------------------------------------------
                                             (423,778)    (259,727)  (261,910)
------------------------------------------------------------------------------
Net current assets                             95,396      120,687    104,487
------------------------------------------------------------------------------
Total assets less current 
liabilities                                   301,729      228,688    218,970
------------------------------------------------------------------------------
Creditors: amounts falling due                            
after more than one year
Bank loans                                   (103,187)     (34,197)   (36,386)
Repurchase commitments                        (58,284)     (49,898)   (49,976)
Consideration payable to Lex                              
Retail Group Limited                                -      (12,516)         -
------------------------------------------------------------------------------
                                             (161,471)     (96,611)   (86,362)
------------------------------------------------------------------------------
Provisions for liabilities and                 (2,773)      (1,065)      (580)
charges
------------------------------------------------------------------------------
Net assets                                    137,485      131,012    132,028
------------------------------------------------------------------------------
                                                         
Capital and reserves                                      
Called up share capital                        15,242       15,242     15,242
Share premium                                  74,697       74,697     74,697
Other reserves                                  9,331        9,331      9,331
Profit and loss account                        38,215       31,742     32,758
------------------------------------------------------------------------------
Equity shareholders' funds (Note 10)          137,485      131,012    132,028
------------------------------------------------------------------------------


Consolidated Cash Flow Statement

                                            Unaudited    Unaudited    Audited
                                             6 Months     6 Months  12 Months
                                                   to           to         to
                                              30.6.99      30.6.98   31.12.98
                                                 £000         £000       £000
------------------------------------------------------------------------------
Cash flow from operating 
activities (Note 8)                            57,354        7,949     27,432
------------------------------------------------------------------------------
Net interest paid                              (6,545)      (2,631)    (6,807)
------------------------------------------------------------------------------
Returns on investments and 
servicing of finance                           (6,545)      (2,631)    (6,807)
------------------------------------------------------------------------------
Taxation                                       (1,563)      (1,017)    (3,404)
------------------------------------------------------------------------------
Payments to acquire tangible fixed
assets                                        (15,996)     (13,458)   (36,051)
Receipts form sale of tangible
fixed assets                                    6,761        7,618     21,263
------------------------------------------------------------------------------
Capital expenditure and financial
investment                                     (9,235)      (5,840)   (14,788)
------------------------------------------------------------------------------
Business acquisitions                         (89,329)      (9,169)   (13,320)
Borrowings of acquired businesses             (26,839)           -          -
Dividend paid to former                                   
shareholders of Evans Halshaw 
Holdings plc post acquisition                  (3,700)           -          -
Deferred consideration paid                         -            -    (11,654)
Business disposals                             11,485        6,073      6,349
------------------------------------------------------------------------------
Acquisitions and disposals                   (108,383)      (3,096)   (18,625)
------------------------------------------------------------------------------
Equity dividends paid                          (4,877)      (4,328)    (6,767)
------------------------------------------------------------------------------
Net cash flow before financing                (73,249)      (8,963)   (22,959)
------------------------------------------------------------------------------
Financing                                                 
Unsecured loans                                86,801       31,880     36,069
Repayment of unsecured bank loans                   -      (10,010)   (13,997)
------------------------------------------------------------------------------
Net cash inflow from financing                 86,801       21,870     22,072
------------------------------------------------------------------------------
Movement in cash and overdrafts                13,552       12,907       (887)
------------------------------------------------------------------------------

Reconciliation of net cash flow to                        
movement in net debt
------------------------------------------------------------------------------
Movement in cash and overdrafts               13,552       12,907        (887)
Cash inflow from increase in debt
financing                                    (86,801)     (21,870)    (22,072)
------------------------------------------------------------------------------
Movement in net debt in the period           (73,249)      (8,963)    (22,959)
Opening net debt                             (48,199)     (25,240)    (25,240)
------------------------------------------------------------------------------
Closing net debt (Note 9)                   (121,448)     (34,203)    (48,199)
------------------------------------------------------------------------------

Notes

1.   This interim report has been prepared on a basis consistent with the
     accounting policies stated in the financial statements for the year ended
     31 December 1998.  Applicable accounting standards have been followed.

2.   The interim report was approved by the board of directors on 13 September
     1999 and is unaudited.

3.   The effective tax rate for 1999 of 34.3% (1998 - 31.5%) is an estimate
     based upon the anticipated charge for the full year on profit on ordinary
     activities before taxation.

4.   A dividend of 4.4p (1998 - 4.0p) net per ordinary share will be paid on
     18 October 1999 to shareholders on the register at the close of business 
     on 1 October 1999.

5.   Earnings per share are based on profits on ordinary activities after
     taxation in each period and the weighted average number of ordinary      
     shares in issue for the six months to 30 June 1999 of 60,964,152 
     (1998 - 60,964,152).  Diluted earnings per share are based on a diluted  
     number of shares of 61,121,572 (1998 - 60,974,724).

     The diluted number of shares is made up as follows:

                                             30.6.99      30.6.98    31.12.98
                                              number       number      number
------------------------------------------------------------------------------
Weighted average number of shares
in issue                                  60,964,152   60,964,152  60,964,152
Weighted average number of                                          
dilutive shares under option                 157,420       10,572      72,992
------------------------------------------------------------------------------
Diluted weighted average number of
shares                                    61,121,572   60,974,724  61,037,144
------------------------------------------------------------------------------


6.   The comparative results for the year ended 31 December 1998 are not the
     company's statutory accounts for that financial year.  Those accounts    
     have been reported on by the company's auditors and delivered to the     
     registrar of companies.  The report of the auditors was unqualified and  
     did not contain a statement under s237 (2) or (3) of the Companies Act   
     1985.

7.   Interest payable
                                            6 Months     6 Months   12 Months
                                                  to           to          to
                                             30.6.99      30.6.98    31.12.98
                                                £000         £000        £000
------------------------------------------------------------------------------
Bank loans and overdrafts                      4,494        1,753       4,276
Manufacturer stocking loans                    1,724        1,219       2,691
Notional interest on deferred                             
consideration on acquisitions                    389          720       1,441
Interest capitalised                             (50)        (246)       (333)
------------------------------------------------------------------------------
                                               6,557        3,446       8,075
------------------------------------------------------------------------------

8.   Net cash inflow from operating activities
                                            6 Months     6 Months   12 Months
                                                  to           to          to
                                             30.6.99      30.6.98    31.12.98
                                                £000         £000        £000
------------------------------------------------------------------------------
Operating profit                              14,323       13,820      26,977
Loss/(profit) on sale of fixed 
assets                                           218          (18)        421
Depreciation                                   5,355        3,422       8,182
Goodwill amortisation                          1,082          126         453
Movement in working capital                   36,320       (9,354)     (8,555)
Other                                             56          (47)        (46)
------------------------------------------------------------------------------
                                              57,354        7,949      27,432
------------------------------------------------------------------------------

9.Analysis of net debt
                                             30.6.99      30.6.98    31.12.98
                                                £000         £000        £000
------------------------------------------------------------------------------
Cash at bank and in hand                      13,007       16,599       1,150
Overdrafts and other borrowings               (1,268)      (4,618)     (2,963)
------------------------------------------------------------------------------
                                              11,739       11,981      (1,813)
Other borrowings due within one year         (30,000)     (11,987)    (10,000)
Other borrowings due after one year         (103,187)     (34,197)    (36,386)
------------------------------------------------------------------------------
Total                                       (121,448)     (34,203)    (48,199)
------------------------------------------------------------------------------
                                                          
Movement in period                                        
Cash at bank and in hand                      11,857       14,532        (917)
Overdrafts and other borrowings                1,695       (1,625)         30
------------------------------------------------------------------------------
                                              13,552       12,907        (887)
Other borrowings due within one year         (20,000)          10       1,997
Other borrowings due after one year          (66,801)     (21,880)    (24,069)
------------------------------------------------------------------------------
Total                                        (73,249)      (8,963)    (22,959)
------------------------------------------------------------------------------

10.  Reconciliation of movements in shareholders' funds
                                          to 30.6.99   to 30.6.98 to 31.12.98
                                                £000         £000        £000
------------------------------------------------------------------------------
Opening shareholders' funds                  132,028      126,373     126,373
Retained earnings                              5,397        4,667       5,578
Exchange adjustment                               60          (28)         77
------------------------------------------------------------------------------
Closing shareholders' funds                  137,485      131,012     132,028
------------------------------------------------------------------------------