Interim Results

Pendragon PLC
07 August 2007





                        INTERIM RESULTS TO 30 JUNE 2007

Pendragon PLC, the UK's leading motor car retailer, today reports interim
results for the six months to 30 June 2007.

Summary:

•  Revenue of £2,702 million (2006: £2,625 million)
•  Profit before tax & exceptionals £32.7 million (2006: £43.0 million)
•  Profit before tax £33.5 million (2006: £51.5 million)
•  Underlying operating margin 2.3% (2006: 2.8%)
•  Adjusted earnings per share 3.5 pence (2006: 4.7 pence)
•  Gearing 86% (December 2006: 121%)
•  Strong operating cash inflow of £128.7 million (2006: £157.7 million)
•  Dividend up 38% to 2.00p (2006: 1.45p)

Trevor Finn, Chief Executive, commented:

'The UK motor retail sector has faced a challenging time this year, and as 
previously announced this has affected our results for the six months.  
Throughout the period we have remained focused on scale efficiencies and cash 
management as we reduce our debt levels following the acquisition of Reg Vardy 
last year. 

These conditions offer a market leader like Pendragon many attractive 
growth opportunities, such as the acquisition of the 19 dealerships announced 
last week.  We expect to identify further opportunities as smaller competitors 
seek to exit the market.'


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

Finsbury        Rollo Head                           Tel:     [phone]
                Gordon Simpson


                     
                      CHIEF EXECUTIVE'S OPERATIONAL REVIEW

Introduction

Trading performance in the first six months of the year has been affected by a
slowdown in consumer demand, as we highlighted in our June trading update. This
has led to an oversupply of new cars, forced into the market by manufacturer
incentives and pre registrations by dealers and, as a consequence, used car
margins have declined. Pendragon's aftersales business has performed well and we
have had good results in our support businesses such as Pinewood Technologies
and our leasing companies. The group has continued to generate significant
amounts of cash which have been used to reduce borrowings and further strengthen
our balance sheet.

We are reporting adjusted earnings per share of 3.5 pence for the period
compared to 4.7 pence in 2006 and an interim dividend of 2.0 pence per share
compared to an interim dividend of 1.45 pence in 2006. The increase in dividend
is in line with indications given in our AGM statement and represents an
increase of 38%. Operating cash inflow of £128.7 million has enabled us to
continue to reduce borrowings and bring gearing down to 86%.

We have generated exceptional property profits of £7.6 million on the sale of
nine surplus properties. We also incurred £2.8 million of costs related to 
closure of dealerships which we have treated as an ordinary trading item in the 
accounts. This is the first part of the £12.0 million of costs, excluding 
goodwill impairment, which we highlighted in our AGM statement, that would be 
incurred to cease operating and close 26 new car franchises. The impairment of 
goodwill relating to these 26 franchises is £6.8 million and is treated as an 
exceptional operating item.

Our dealerships in Germany were sold at the end of June which brought to an end
many years of operating in that market. Latterly the dealerships had become a
relatively small part of the group and were no longer deemed to be a core
activity. The results of the German operations are shown separately as a loss
from discontinued operations of £1.5 million.


Results

The results for the six months to 30 June 2007 are summarised as follows:

                                              £m           2007           2006
--------------------------------------------------------------------------------
Revenue                                                 2,702.4        2,625.1
--------------------------------------------------------------------------------
Underlying operating profit                                61.3           73.5
--------------------------------------------------------------------------------
Exceptional operating costs                                (6.8)          (3.4)
--------------------------------------------------------------------------------
Operating profit before other income                       54.5           70.1
--------------------------------------------------------------------------------
Other income - gain on sale of property                     7.6           11.9
--------------------------------------------------------------------------------
Operating profit                                           62.1           82.0
--------------------------------------------------------------------------------
Finance costs                                             (28.8)         (30.8)
--------------------------------------------------------------------------------
Share of joint venture profit                               0.2            0.3
--------------------------------------------------------------------------------
Profit before tax                                          33.5           51.5
--------------------------------------------------------------------------------
Tax                                                        (4.2)         (15.7)
--------------------------------------------------------------------------------
Discontinued operation                                     (1.5)          (0.7)
--------------------------------------------------------------------------------
Profit after tax                                           27.8           35.1
--------------------------------------------------------------------------------
Earnings per share - basic                                  4.4p           5.6p
--------------------------------------------------------------------------------
Earnings per share - adjusted                               3.5p           4.7p
--------------------------------------------------------------------------------
Dividend per share                                         2.00p          1.45p
--------------------------------------------------------------------------------

Revenue The net effect of acquisitions and disposals of dealerships over the
past eighteen months has been to increase revenues year on year by £77.3 million
to £2,702.4 million. On a like for like basis revenue is down 3.0% which is
principally due to reduction in the number of vehicle sales. This has been due
to the difficult market for used car sales in the UK over the past six months
and has meant that the number of used cars we have sold in the first half has
been behind our planned volumes. Margins have been lower which are the main
factors leading to profits being behind where we expected them to be for the
first half.

Underlying operating profit was £61.3 million compared to £73.5 million last
year. The underlying operating profit margin was 2.3% against 2.8 % for the same
period in 2006. A number of factors have contributed to the movement in
operating profits in addition to the reduction in margins on car sales. The
other items relate to increased rents and dealership closure costs. Although
having little impact on profit before tax, operating profits are reduced year on
year by increased property rents of £8 million after our successful property
joint venture sale and lease back at the end of 2006. We have also included in
operating costs £2.8 million by way of one off dealership closure costs. We are
pleased with the performance of our support businesses which have continued to
perform well and have increased profits this year by £2.0 million. In the first
half we have also had the benefit of savings relating to Vardy head office
activities which were £2.0 million more than in the first six months last year.

Exceptional operating costs of £6.8 million relate to the goodwill impaired on
all the dealerships which are to be sold or closed as part of our accelerated
closure of selected underperforming dealerships. Following the acquisition of
Reg Vardy we reviewed the franchise portfolio and identified a number of
dealership properties that had greater value for alternative use or where the
level of dealership profitability was insufficient to justify continued trading
and further investment. We announced the closure and disposal programme in our
AGM statement against which we have incurred £2.8 million of costs in the first
half. We have treated this as an ordinary trading item in the accounts. We aim
to complete this closure programme by this time next year releasing an estimated
£22 million of cash.

Other income is the profit on the disposal of surplus property assets resulting
from our ongoing active management of our property portfolio. The total proceeds
of these sales were £25.5 million of which £7.6 million was profit. Profits from
the sale of surplus properties have been a regular feature over the past years
and we expect that a further £20 million of profits on property sales will be
generated over the next 15 months.

Financing costs have reduced by £2.0 million to £28.8 million. Our borrowings
reduced at the end of 2006 following a property joint venture transaction. The
benefit of this to our interest costs has in part been offset by the increase in
interest rates since the first half of 2006. The increase in interest rates is
equivalent to £4.0 million of additional cost. We have also financed the Vardy
acquisition for the full six months this year whereas in 2006 it was for four
months.

Adjusted profit before tax of £32.7 million (2006:£43.0 million) is underlying
operating profit of £61.3 million (2006: £73.5 million) less finance costs and
share of joint venture profit of £28.6 million (2006: £30.5 million).


A summary of revenues and operating profits by division is summarised below:

£m                                   2007                       2006
                           -----------------------     -----------------------
                             Revenue     Operating       Revenue    Operating
                                            profit                     profit
Stratstone                   1,103.0          23.6         1,097.2       31.5
--------------------------------------------------------------------------------
Evans Halshaw                1,450.3          22.8         1,366.9       28.7
--------------------------------------------------------------------------------
USA                             94.8           2.8           108.1        3.2
--------------------------------------------------------------------------------
Support businesses              91.0          12.1            82.0       10.1
--------------------------------------------------------------------------------

Motor Retail Business

Our franchised motor retail activities are principally in the UK with a well
established small business in the USA. We currently operate 359 franchise
points, of which nine are in the USA. We also operate a number of franchised
commercial truck businesses.

UK Overall national new car registrations increased by 2.0% in the first six
months of this year compared to the first six months of 2006. The manufacturers
we represent achieved only 0.7% growth. However, registrations do not
necessarily reflect consumer demand in the short term and we have seen a
slowdown in consumers willing to commit to buying new cars. In order to keep
registrations up in this type of environment we are seeing more manufacturer
incentives and pre registrations by dealers which have led to an adverse impact
mainly on used car margins.

In the UK we operate 350 franchised points of which 165 are prestige, branded as
Stratstone, 164 are Evans Halshaw volume dealerships and 21 are truck
dealerships trading under the Chatfields brand. The results are summarised in
the tables below. Chatfields is included in the results of Stratstone.

Stratstone is the UK's leading prestige motor car retailer and its results for
the first six months of this year are as follows:



               Revenue         Gross        Gross    Underlying     Underlying  Total units  Gross profit
                              profit     margin %     operating      operating         sold    profit per
£m                                                       profit       margin %         '000        unit £
---------------------------------------------------------------------------------------------------------
Existing       1,094.8        140.2          12.8          24.1            2.2
---------------------------------------------------------------------------------------------------------
Disposed           8.2          1.3          16.1          (0.5)          (6.3)
---------------------------------------------------------------------------------------------------------
Total 2007     1,103.0        141.5          12.8          23.6            2.1         38.6         1,868
---------------------------------------------------------------------------------------------------------
Total 2006     1,097.2        145.0          13.2          31.5            2.9         38.9         2,018
---------------------------------------------------------------------------------------------------------


Revenue and units sold within our Stratstone franchises are in line with last
year and on a like for like basis they were down 4%. Whilst in volume terms this
is a creditable performance in a difficult market, we were disappointed not to
have achieved our expectations to increase revenue by around £40 million which
would have meant like for like volumes would have been in line with last year.

Gross margin has been lower in the period due to more difficult trading
conditions for most of our franchises. Last year we had the benefit of new
products such as Range Rover Sport which contributed strongly. Operating profit
reduced by £7.9 million to £23.6 million. Whilst around a third of this arises
from a reduction in gross profit, the remainder is split between the increase in
rent and an increase in other property costs such as heat, light, power and
rates.

Since rebranding our prestige dealerships as Stratstone we have invested in a
number of promotional events and are pleased with the way the recognition of the
brand is gaining momentum.

Evans Halshaw is the leading volume car retailer in the UK and its results for
the first six months of this year are as follows:

               Revenue         Gross        Gross    Underlying     Underlying  Total units  Gross profit
                              profit     margin %     operating      operating         sold    profit per
£m                                                       profit       margin %         '000        unit £
---------------------------------------------------------------------------------------------------------
Existing       1,436.7         175.4         12.2          25.1            1.8
---------------------------------------------------------------------------------------------------------
Disposed          13.6           1.2          8.9          (2.3)         (17.1)
---------------------------------------------------------------------------------------------------------
Total 2007     1,450.3         176.6         12.2          22.8            1.6        137.0           756
---------------------------------------------------------------------------------------------------------
Total 2006     1,366.9         182.0         13.3          28.7            2.1        131.4           819
---------------------------------------------------------------------------------------------------------

Revenue increased by £83.4 million with units sold up 4.3%. This increase is
mainly due to having a full six month contribution from Vardy dealers acquired
in February last year. This is a very creditable performance under difficult
market conditions. We had, however, planned revenue to be approximately £30.0
million higher which we have not achieved due to like for like vehicle
units being down 2.0%.

Gross profit in most franchises has suffered in the market downturn, with profit
per unit down £63, which has led to operating profits being down by £5.9
million. We have continued to achieve cost savings within the enlarged group.
The cost savings have reduced the impact of the fall in gross profit and
increase in rents.

We were pleased to announce the acquisition of 19 dealerships from Dixon Motors
last week for £17.0 million. These have been rebranded as Evans Halshaw and we
expect them to make a positive contribution to group profits in 2008.



USA The market for new cars in the USA in the first half of 2007 was down by
1.5% to 8.2 million registrations. We represent a small number of brands in
California: Jaguar, Land Rover, Aston Martin and SAAB. Nationally, Land Rover
sales were in line with last year with sales of the new Freelander offsetting
the reduction in other model sales. Jaguar volumes fell 26%, with all models
down with the exception of XK. Aston Martin and SAAB sales were marginally down.
We do not see any near term improvement in the sales performance of Jaguar until
the new S Type is launched.

The results for the first half of 2007 are summarised as follows:

               Revenue         Gross        Gross    Underlying     Underlying  Total units  Gross profit
                              profit     margin %     operating      operating         sold    profit per
£m                                                       profit       margin %         '000        unit £
---------------------------------------------------------------------------------------------------------
Total 2007        94.8          15.9         16.8           2.8            3.0          3.0         2,957
---------------------------------------------------------------------------------------------------------
Total 2006       108.1          17.6         16.2           3.2            3.0          3.2         2,837
---------------------------------------------------------------------------------------------------------

Revenue is down due to two principal factors; at the end of 2006 we disposed of
two loss making dealerships which in the first half of 2006 contributed sales of
£8.5 million; and adverse exchange rate movements. Gross margins have
strengthened reflecting the richer mix of businesses whilst overall operating
margins have remained strong at 3%.

Germany We completed the disposal of our remaining four German dealerships at
the end of June 2007. The net proceeds of the sale were £6.3 million. In the
period prior to disposal the dealerships made a loss before tax of £1.2 million
(2006 £0.7 million) with a further loss of £0.3 million arising on the disposal.
The German business has been classified as a discontinued operation in the
income statement and its results are therefore excluded from the continuing
business. The comparatives have been shown on a similar basis.


Support Services We provide a broad range of support services both to the
Pendragon group and to external customers. The services are provided by a number
of specialist businesses which consist of contract hire and leasing, dealership
management software systems and wholesale parts distribution.

The results for the first half of 2007 are summarised as follows:


               Revenue         Gross        Gross    Underlying     Underlying  
                              profit     margin %     operating      operating       
£m                                                       profit       margin %      
--------------------------------------------------------------------------------
Total 2007       91.0           30.1         33.1          12.1           13.3
--------------------------------------------------------------------------------
Total 2006       82.0           26.4         32.2          10.1           12.4
--------------------------------------------------------------------------------

This is a strong performance from this division and reflects the investments in
people and systems we have made over the past few years. Margins have been
improved and operating profit has increased by £2.0 million. Our contract hire
and leasing business operates a fleet of almost 18,000 units. We have been more
cautious than many of our competitors on setting residual values over the past
twelve months hence our fleet size has reduced slightly. We believe this to be
the correct approach to residual value setting in an uncertain market.

Pinewood Technologies, our computer software company, has seen increased demand
for its products from external customers as well as rolling out the new Pinnacle
dealer management system to our own sites. In total we now have over 10,000 user
licences in place, an increase of 30% from the beginning of the year. To date we
have implemented Pinnacle at 299 of our sites and are installing the 300th
system in the group today at our Ford dealership in Glasgow. This then leaves 56
sites to complete by year end.

Our wholesale parts business, Quickco, has had a good first half with revenues
maintained and profits up from last year. This has been achieved by extending
the product range to include higher margin parts and by containing overhead
costs.

Finance

We have a strong balance sheet with freehold property of £245.2 million which
includes surplus property earmarked for disposal. Borrowings at 30 June 2007
were £289.6 million, down £80.1 million since the beginning of the year. At 86%
we are pleased to have achieved the target level of gearing six months ahead of
the plan that we set ourselves when we acquired Reg Vardy in February 2006.

Operating cash inflow for the first six months was £128.7 million, which
compares with £157.7 million generated in 2006. The operating cash inflow
includes a reduction in working capital investment of £37.2 million 
(2006: £52.7 million).

Net investment in property, plant and equipment for the six months was £20.8
million (2006: £8.1 million). This includes investment in two new properties
acquired for future development, refurbishments plus the net increase in plant
and machinery, the contract hire fleet and service loan cars. Proceeds from
property disposals were £25.5 million (2006: £32.4 million). In addition to this
£17.9 million was raised from business disposals (2006: £22.2 million).

Current Trading and Prospects

Our current trading performance is in line with our recent trading update. We
expect the used car market to remain subdued for the remainder of the year due
to the uncertain interest rate environment and manufacturer incentives on new
cars. Our aftersales business and support businesses continue to perform well
and have been relatively unaffected by the recent consumer slowdown and we
anticipate that they will continue to perform well. Our programme of surplus
property disposals and selected dealership closures is proceeding well and will
contribute to improving profits over the next twelve months.

We have seen a large amount of consolidation in the motor retail sector in the
UK over recent years. In these difficult trading conditions within the sector 
acquisition opportunities like the one we announced last week will present 
themselves to us as smaller players seek an exit. Pendragon has a strong balance 
sheet and management strength in depth to enable us to continue to grow and 
build value for long term shareholders. We will remain at the forefront of 
consolidation in the sector and ahead of the competition in realising scale 
benefits.


TREVOR FINN
Chief Executive
7 August 2007




                          Consolidated Income Statement

Interim Results
for the six months ended 30 June 2007

                                       6 Months to   6 Months to     12 Months
--------------------------------------------------------------------------------
                                          30.06.07      30.06.06   to 31.12.06
                                                £m            £m            £m
--------------------------------------------------------------------------------
Continuing operations
Revenue                                    2,702.4       2,625.1       5,058.5

Cost of sales                             (2,347.2)     (2,259.1)     (4,357.2)
--------------------------------------------------------------------------------

Gross profit                                 355.2         366.0         701.3
Operating expenses                          (300.7)       (295.9)       (561.6)
--------------------------------------------------------------------------------
Operating profit before other income          54.5          70.1         139.7

--------------------------------------------------------------------------------
Operating profit before other income,
analysed as:
Before exceptional items                      61.3          73.5         135.7
Goodwill impairment                           (6.8)            -          (0.9)
Abortive acquisition costs                       -          (0.9)         (1.0)
Integration and closure costs                    -          (2.5)         (4.0)
Gain on curtailment of defined benefit
pension schemes                                  -             -           9.9
--------------------------------------------------------------------------------

Operating profit before other income          54.5          70.1         139.7
--------------------------------------------------------------------------------

Other income - gain on sale of
businesses and property                        7.6          11.9          24.3
--------------------------------------------------------------------------------
Operating profit                              62.1          82.0         164.0
--------------------------------------------------------------------------------

Finance costs (note 7)                       (40.3)        (38.8)        (84.4)
Finance income (note 8)                       11.5           8.0          17.7
--------------------------------------------------------------------------------
Net finance costs                            (28.8)        (30.8)        (66.7)
--------------------------------------------------------------------------------
Share of profit before tax from joint
venture                                        0.3           0.3           0.5
Share of income tax expense from joint
venture                                       (0.1)            -          (0.1)
--------------------------------------------------------------------------------
Share of post tax profit from joint
venture                                        0.2           0.3           0.4
--------------------------------------------------------------------------------

Profit before taxation                        33.5          51.5          97.7

Income tax expense (note 9)                   (4.2)        (15.7)        (28.9)
--------------------------------------------------------------------------------
Profit from continuing operations             29.3          35.8          68.8

Discontinued operation
Loss from discontinued operation 
(net of income tax) (note 6)                  (1.5)         (0.7)         (1.3)
--------------------------------------------------------------------------------

Profit attributable to equity shareholders    27.8          35.1          67.5
================================================================================

Earnings per share
Basic earnings per ordinary share (note 11)    4.4p          5.6p         10.7p
Diluted earnings per ordinary share (note 11)  4.3p          5.5p         10.6p

Continuing operations
Basic earnings per ordinary share (note 11)    4.6p          5.7p         10.9p
Diluted earnings per ordinary share (note 11)  4.5p          5.6p         10.8p

Dividends
Dividend per share - interim (note 10)        2.00p         1.45p         1.45p
Dividend per share - final                                                2.00p

All amounts are unaudited


                           Consolidated Balance Sheet

--------------------------------------------------------------------------------
                                        30.06.07      Restated *      31.12.06
                                              £m        30.06.06            £m
                                                              £m
--------------------------------------------------------------------------------
Non-current assets
Property, plant and equipment              394.3           581.1         420.4
Goodwill                                   425.9           471.4         433.8
Other intangible assets                      1.2             2.3           1.4
Investment in joint venture                  3.4             2.2           3.0
--------------------------------------------------------------------------------

Total non-current assets                   824.8         1,057.0         858.6
--------------------------------------------------------------------------------
Current assets
Inventories                                812.2           859.7         850.2
Trade and other receivables                274.7           310.3         260.9
Cash and cash equivalents                   76.0            36.2          19.7
Non-current assets classified as held
for sale                                    53.1            22.5          38.4
--------------------------------------------------------------------------------

Total current assets                     1,216.0         1,228.7       1,169.2
--------------------------------------------------------------------------------

Total assets                             2,040.8         2,285.7       2,027.8
--------------------------------------------------------------------------------
Current liabilities
Interest bearing loans and borrowings       (8.4)         (210.0)        (10.4)
Trade and other payables                (1,207.2)       (1,264.1)     (1,171.8)
Deferred income                             (0.9)              -          (0.9)
Current tax payable                        (29.2)          (24.6)        (19.5)
Provisions                                  (3.5)           (0.8)         (4.3)
--------------------------------------------------------------------------------

Total current liabilities               (1,249.2)       (1,499.5)     (1,206.9)
--------------------------------------------------------------------------------
Non-current liabilities
Interest bearing loans and borrowings     (345.9)         (403.1)       (371.0)
Derivative financial instruments           (11.3)           (4.8)         (8.0)
Deferred income                            (20.7)              -         (21.1)
Deferred tax liabilities                   (39.8)          (17.1)        (42.0)
Retirement benefit obligations             (31.2)          (73.5)        (65.2)
Provisions                                  (5.4)           (1.2)         (7.6)
--------------------------------------------------------------------------------

Total non-current liabilities             (454.3)         (499.7)       (514.9)
--------------------------------------------------------------------------------

Total liabilities                       (1,703.5)       (1,999.2)     (1,721.8)
--------------------------------------------------------------------------------

Net assets                                 337.3           286.5         306.0
================================================================================

Capital and reserves
Called up share capital                     32.8            32.8          32.8
Share premium account                       56.8            56.8          56.8
Capital redemption reserve                   2.5             2.5           2.5
Other reserves                              12.6            12.6          12.6
Translation reserve                         (0.3)           (0.2)         (0.3)
Retained earnings                          232.9           182.0         201.6
--------------------------------------------------------------------------------

Total equity                               337.3           286.5         306.0
================================================================================

All amounts are unaudited

* Restated following change of accounting policy in 2006 in respect of
  recognition of actuarial gains and losses arising on defined benefit pension
  plans. Full details of the change in policy are presented in the financial
  statements for the year ended 31 December 2006.


                        Consolidated Cash Flow Statement

--------------------------------------------------------------------------------
                                      6 Months to   6 Months to   12 Months to
                                         30.06.07      30.06.06       31.12.06
                                               £m            £m             £m
--------------------------------------------------------------------------------

Cash flows from operating activities
Profit after taxation                        27.8          35.1           67.5
Adjustment for income from joint venture     (0.2)         (0.3)          (0.4)
Adjustment for interest                      29.4          31.3           67.6
Adjustment for taxation                       4.2          15.7           28.9
--------------------------------------------------------------------------------
Operating profit                             61.2          81.8          163.6
Profit on sale of businesses and property    (7.3)        (11.9)         (24.3)
Depreciation and amortisation                30.1          34.8           65.1
Share based payments                          0.7           0.3            0.9
Goodwill impairment                           6.8             -            0.9
Decrease in working capital                  37.2          52.7           13.2
--------------------------------------------------------------------------------
Cash generated from operations              128.7         157.7          219.4
Net interest paid                           (27.2)        (29.7)         (67.2)
Taxation paid                                (3.6)        (15.6)         (24.2)
--------------------------------------------------------------------------------

Net cash from operating activities           97.9         112.4          128.0
--------------------------------------------------------------------------------

Cash flows from investing activities
Business acquisitions (net of cash acquired)    -        (458.8)        (466.0)
Proceeds from sale of businesses             17.9          22.2           23.1
Investment in joint venture                  (0.1)         (1.3)         (15.1)
Purchase of property, plant and equipment   (98.2)        (85.4)        (171.2)
Proceeds from sale of property,
plant and equipment                          77.4          77.3          388.9
(Payments) / receipts from sales
of own shares                                (0.4)          0.5            1.7
--------------------------------------------------------------------------------

Net cash used in investing activities        (3.4)       (445.5)        (238.6)
--------------------------------------------------------------------------------

Cash flows from financing activities
Payment of capital element of
finance lease rentals                        (2.4)         (2.6)          (5.6)
Repayment of unsecured bank loans           (21.5)        (52.2)        (413.3)
Repayment of loan notes                      (1.3)       (114.5)         (12.5)
Proceeds from issue of unsecured
loans                                           -         470.0          502.8
Dividends paid to shareholders              (12.7)         (8.2)         (17.4)
--------------------------------------------------------------------------------

Net cash (used in) / from
financing activities                        (37.9)        292.5           54.0
--------------------------------------------------------------------------------

Effects of exchange rate changes
on cash held                                 (0.3)         (0.6)          (1.1)
--------------------------------------------------------------------------------
Net increase / (decrease) in
cash and cash equivalents                    56.3         (41.2)         (57.7)
Opening cash and cash equivalents            19.7          77.4           77.4
--------------------------------------------------------------------------------

Closing cash and cash equivalents (note 12)  76.0          36.2           19.7
================================================================================


            Consolidated Statement of Recognised Income and Expense

--------------------------------------------------------------------------------
                                     6 Months to   6 Months to    12 Months to
                                        30.06.07      30.06.06        31.12.06
                                              £m            £m              £m
--------------------------------------------------------------------------------
Foreign currency translation differences 
for foreign operations                         -          (0.1)           (0.2)
Defined benefit plan actuarial gains 
and losses                                  22.7           9.0            18.1
Income tax on income and expense     
recognised directly in equity               (6.8)         (2.7)           (5.4)
--------------------------------------------------------------------------------
Income and expense recognised directly 
in equity                                   15.9           6.2            12.5
Profit for the period                       27.8          35.1            67.5
--------------------------------------------------------------------------------
Total recognised income and expense for 
the period attributable to equity holders   
of the company                              43.7          41.3            80.0
================================================================================


Notes

 1.  This interim financial information has been prepared applying the
     accounting policies and presentation that were applied in the preparation
     of the company's published consolidated financial statements for the year
     ended 31 December 2006.

 2.  The comparative figures for the financial year ended 31 December 2006 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 (i) unqualified,
     (ii) did not include a reference to any matters to which the auditors drew
     attention by way of emphasis without qualifying their report, and (iii) did
     not contain a statement under section 237(2) or (3) of the Companies Act
     1985.

 3.  The interim report was approved by the board of directors on 7 August 2007
     and is unaudited.

 4.  Exceptional items

     Exceptional items of £6.8 million were incurred during the first half of
     2007 in respect of impairment of goodwill on businesses scheduled for
     closure.

     Exceptional items incurred during the first half of 2006 totalled £3.4
     million. £2.5 million is in respect of integration costs arising on the
     acquisition of Reg Vardy Plc and £0.9 million is in respect of the abortive
     acquisition costs incurred in the unsuccessful bid for Lookers PLC.


 5.  Segmental Analysis                   6 Months      6 Months     12 Months
                                       to 30.06.07   to 30.06.06   to 31.12.06
                                                £m            £m            £m
     ---------------------------------------------------------------------------
     Revenue
     Stratstone                            1,098.3       1,097.9       2,143.8
     Evans Halshaw                         1,450.3       1,366.9       2,623.6
     Chatfields                               99.4         107.4         200.4
     Support                                  54.4          52.9          90.7
     ---------------------------------------------------------------------------

     Revenue from external customers       2,702.4       2,625.1       5,058.5
     ===========================================================================

     Result
     Stratstone                               22.1          31.5          56.1
     Evans Halshaw                            17.8          28.6          52.7
     Chatfields                                2.5           3.3           6.1
     Support                                  12.1          10.1          19.9
     Central                                   7.6           8.5          29.2
     ---------------------------------------------------------------------------

     Result by segment                        62.1          82.0         164.0
     Finance costs                           (28.8)        (30.8)        (66.7)
     Share of profit of joint venture          0.2           0.3           0.4
     Income tax expense                       (4.2)        (15.7)        (28.9)     
     ---------------------------------------------------------------------------

     Profit for period                        29.3          35.8          68.8     
     ===========================================================================


 6.  Discontinued operation

     On 30 June 2007 the group sold the trading assets of all its German based
     motor vehicle dealerships. The German division was not a discontinued
     operation or classified as held for sale as at 31 December 2006 and
     therefore the comparative income statement has been re-presented to show
     the discontinued operation separately from continuing operations.


     Results of discontinued operation    6 Months      6 Months     12 Months
                                       to 30.06.07   to 30.06.06   to 31.12.06
                                                £m            £m            £m
     ---------------------------------------------------------------------------
     Revenue                                  20.3          20.4          42.5
     Expenses                                (21.5)        (21.1)        (43.8)    
     ---------------------------------------------------------------------------
     Results from operating activities        (1.2)         (0.7)         (1.3)
     Income tax expense                          -             -             -
     ---------------------------------------------------------------------------
     Results from operating activities        
     net of income tax                        (1.2)         (0.7)         (1.3)
     Loss on sale of discontinued operation   (0.3)            -             -
     ---------------------------------------------------------------------------
     Loss for the period                      (1.5)         (0.7)         (1.3)
     ===========================================================================


 7.  Finance costs                        6 Months      6 Months     12 Months
                                       to 30.06.07   to 30.06.06   to 31.12.06
                                                £m            £m            £m
     ---------------------------------------------------------------------------
     Interest payable on bank borrowings      10.0          14.1          29.3     
     Interest payable on loan notes            4.5           3.8           9.5
     Vehicle stocking plan interest           15.8          11.4          25.3
     Interest payable on finance leases          -           0.1           0.4
     Fair value loss - interest rate swaps       -           1.0           1.0
     Unwinding of discounts in                
     contract hire residual values             1.0           1.2           2.7
     Interest on pension scheme obligations    9.0           7.2          16.5
     ---------------------------------------------------------------------------
                                              40.3          38.8          84.7
     Less interest capitalised                   -             -          (0.3)
     ---------------------------------------------------------------------------

     Total finance costs                      40.3          38.8          84.4
     ===========================================================================


 8.  Finance income                       6 Months      6 Months     12 Months
                                       to 30.06.07   to 30.06.06   to 31.12.06
                                                £m            £m            £m
     ---------------------------------------------------------------------------
     Interest received on bank deposits        0.5           0.4           0.8
     Interest on pension scheme assets        11.0           7.4          16.9
     Other interest receivable                   -           0.2             -
     ---------------------------------------------------------------------------

     Total finance income                     11.5           8.0          17.7
     ===========================================================================


 9.  Based upon the anticipated profit on ordinary activities before taxation
     for the full year, the effective tax rate for 2007 is estimated at 30.5%
     (2006 : 30.9%), excluding the impact of the Finance Act 2007. The impact of
     the Finance Act 2007 on the deferred tax liability are a one-off reduction
     in 2007 due to the removal of balancing adjustments on the disposal of
     industrial buildings and a reduction in the tax rate from April 2008
     onwards from 30% to 28%. The amount of this reduction is £5.9m and due to
     its one-off nature is deemed exceptional.

10.  A dividend of 2.00p (2006 : 1.45p) net per ordinary share will be paid on 3
     October 2007 to shareholders appearing on the register at the close of
     business on 7 September 2006. Comparative numbers have been restated
     following the subdivision of the ordinary shares of 25p each into 5 new
     ordinary shares of 5p each.
    

11.  Earnings per share                   6 Months      6 Months     12 Months
                                       to 30.06.07   to 30.06.06   to 31.12.06
                                             pence         pence         pence
     ---------------------------------------------------------------------------
     Basic earnings per share -                
     continuing operations                     4.6           5.7          10.9
     Basic earnings per share -           
     discontinued operation                   (0.2)         (0.1)         (0.2)     
     ---------------------------------------------------------------------------
     Basic earnings per share                  4.4           5.6          10.7
     Effect of non trading items              (0.9)         (0.9)         (3.2)
     ---------------------------------------------------------------------------

     Adjusted earnings per share               3.5           4.7           7.5
     ---------------------------------------------------------------------------

     Diluted earnings per ordinary           
     share - continuing operations             4.5           5.6          10.8
     Diluted earnings per ordinary             
     share - total                             4.3           5.5          10.6
     ---------------------------------------------------------------------------

     The calculation of basic, diluted and adjusted
     earnings per share is based on:                                 
  
     Number of shares (millions)          30.06.07      30.06.06      31.12.06
                                            number        number        number
     ---------------------------------------------------------------------------
     Weighted average number of shares       
     used in basic and adjusted          
     earnings per share calculation          634.9         624.0         629.0
     Weighted average number of               
     dilutive shares under option              9.8          16.5          10.7
     ---------------------------------------------------------------------------
     Diluted weighted average number         
     of shares used in diluted             
     earnings per share calculation          644.7         640.5         639.7
     ===========================================================================
     ===========================================================================
     ---------------------------------------------------------------------------
     Earnings                             6 Months      6 Months     12 Months
                                       to 30.06.07   to 30.06.06   to 31.12.06
                                                £m            £m            £m
     ---------------------------------------------------------------------------
     Continuing operations                    29.3          35.8          68.8
     Discontinued operation                   (1.5)         (0.7)         (1.3)
     ---------------------------------------------------------------------------
     Earnings for basic and diluted           
     earnings per share calculation           27.8          35.1          67.5

     Adjusting items:
     Profit on business and property         
     disposals                                (7.3)        (11.9)        (24.3)
     Goodwill impairment                       6.8             -           0.9
     Abortive acquisition costs                  -           0.9           1.0
     Gain on curtailment of defined             
     benefit pension scheme                      -             -          (9.9) 
     Operating exceptional costs                 -           2.5           4.0
     Exceptional deferred tax credit          
     (see note 9)                             (5.9)            -             -
     Tax effect of adjusting items             0.6           2.8           8.1
     ---------------------------------------------------------------------------
     Earnings for adjusted earnings          
     per share calculation                    22.0          29.4          47.3
     ===========================================================================

     The directors consider that the adjusted earnings per share figures provide
     a better measure of comparative performance.

     Comparative numbers have been restated following the subdivision of the
     ordinary shares of 25p each into 5 new ordinary shares of 5p each.

    
12.  Cash and cash equivalents            30.06.07      30.06.06      31.12.06
                                                £m            £m            £m
     ---------------------------------------------------------------------------

     Bank balances and cash equivalents       76.0          36.2          19.7
     ===========================================================================
     

13.  Net borrowings                       30.06.07      30.06.06      31.12.06
                                                £m            £m            £m
     ---------------------------------------------------------------------------
     Cash and cash equivalents            
     (See note 12)                            76.0          36.2          19.7
     Current interest bearing loans           
     and borrowings                           (8.4)       (210.0)        (10.4)
     Non-current interest bearing          
     loans and borrowings                   (345.9)       (403.1)       (371.0)    
     Derivative financial instruments        (11.3)         (4.8)         (8.0)
     ---------------------------------------------------------------------------
                                            (289.6)       (581.7)       (369.7)    
     ===========================================================================


14.  Reserves

                                            Share      Share        Other    Translation   Accumulated     Total
                                          capital    premium     reserves    differences        profit
                                               £m         £m           £m             £m            £m        £m
     -----------------------------------------------------------------------------------------------------------
     Balance at 1 January 2006              32.8        56.8         15.1           (0.1)        134.7     239.3
     
     Total recognised income and expense       
     for 2006                                  -           -            -           (0.2)         80.2      80.0
     Dividends                                 -           -            -              -         (17.4)    (17.4)
     Share based payments                      -           -            -              -           2.4       2.4
     Disposal of own shares in share trusts    -           -            -              -           1.7       1.7
     -----------------------------------------------------------------------------------------------------------
     Balance at 31 December 2006            32.8        56.8         15.1           (0.3)        201.6     306.0
     -----------------------------------------------------------------------------------------------------------
     
     Balance at 1 January 2007              32.8        56.8         15.1           (0.3)        201.6     306.0
    
     Total recognised income and expense     
     for 6 months to 30 June 2007              -           -            -              -          43.7      43.7
     Dividends                                 -           -            -              -         (12.7)    (12.7)
     Share based payments                      -           -            -              -           0.7       0.7
     Increase of own shares in share trusts    -           -            -              -          (0.4)     (0.4)
     ------------------------------------------------------------------------------------------------------------
     
     Balance at 30 June 2007                32.8        56.8         15.1           (0.3)        232.9     337.3
     ------------------------------------------------------------------------------------------------------------
     
15.  Pension Scheme Obligations

     The net liability for defined benefit obligations has decreased from £65.2 million at 31 December
     2006 to £31.2 million at 30 June 2007. The decrease of £34.0 million comprises contributions of £9.3
     million, a credit to the income statement of £2.0 million and a net actuarial gain of £22.7 million.
     The net actuarial gain has arisen in part to changes in the principal assumptions used in the
     valuation of the scheme's assets and liabilities over those used at 31 December 2006. The
     assumptions subject to change are the discount rate 5.7% (2006: 5.2%), Inflation rate 3.1%
     (2006: 2.9%), and rate of increase in pensions in payment 3.0 - 3.1% (2006: 2.9%).







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