AGM Statement

Pendragon PLC
27 April 2007




FOR IMMEDIATE RELEASE                                       27 April 2007


                                 AGM STATEMENT


Pendragon PLC, the UK's largest car dealership group, today held its Annual
General Meeting. The Chairman, Sir Nigel Rudd, made the following statement:

'Car market and current trading

National new car registrations in the first quarter were up 2.9%. Nationally the
demand for new cars during the first quarter has been below the same period last
year. Moving into April there were a significant number of cars registered and
not sold to a customer. These cars are known as pre-registered cars and are
usually sold with a greater discount than a new car.

This over supply of nearly new cars puts pressure on the used car market and in
the first quarter volumes and margins on used cars have been lower although they
have improved during March.

The over supply of new cars is placing increasing pressure on franchised
dealerships as manufacturers supply other 'channels' usually categorised as
'fleet'. This is particularly affecting small outlets in secondary markets as
retail customers are more and more seeking to buy pre-registered cars, as
previously explained. For many small dealership locations the value of holding a
new car franchise is outweighed by the cost and complexity of holding it. As a
consequence of this there is an ongoing attrition of dealerships and the number
of dealership locations is reducing as owners leave the industry and often sell
their property for alternative use. Over the last 10 years the number of
franchised dealers in the UK has fallen from approximately 8,000 to
approximately 5,000.

Consolidation and rationalisation

At the same time as this attrition is taking place there is also a consolidation
underway in which Pendragon is taking a leading role. The Pendragon business
model is based upon consolidating by acquisition using debt then using business
and asset disposals combined with positive cash flow to reduce debt and then
repeating the process.

After a delay of eight months due to deliberations by the OFT we were cleared to
integrate our most recent acquisition Reg Vardy PLC. We have also now completed
an appraisal, post Vardy integration, of other dealerships and franchises which
we believe have, or will, become too marginal to continue trading in the current
market or where we can reconfigure our assets in a particular geographic area in
order to accelerate our debt reduction programme. Since the OFT clearance at the
end of October we have taken the following actions:

   •We have sold 8 franchised dealerships.
   •We have terminated or ceased operating 8 new car franchises.
   •We have served notice to cease operating with a further 26 new car
    franchises.

These actions will have a one off adverse effect on operating profits but will
bring a significant acceleration to our cash generation plans. The action above
would be very similar to the approach taken by private equity.

Over the next 18 months the actions should have the following effect:

   •Reduction in operating profit of approximately £12 million over the
    period will be more than offset by profits from business and property
    disposals of approximately £28 million after goodwill write offs.
   •Cash inflow of approximately £75 million over the same period.

Clearly the reduction in our borrowing requirements will have a positive effect
on profits as a result of our reduced funding requirements. Importantly this
cash flow will financially reposition the group to quickly continue the
consolidation of the sector.

Property disposals and share buyback

At the current time we have surplus properties under offer with estimated
proceeds of £53 million and a current book value of £26 million. These proceeds
are included in the £75 million referred to above.

In order to give shareholders the benefit of holding freehold property it is the
Board's current intention to use profits made from property disposals to buy
back shares for cancellation.

The above plan of action should give long term shareholders increased
transparency of our plans. As a further change to give greater transparency to
long term investors I am pleased to announce that we will give a forecast at
each AGM of our minimum dividend for the year. The dividend relating to 2007
will be at least 4.0 pence per share, an increase of 16% over our total dividend
for 2006.

Finally, over the last five years we have increased adjusted earnings per share
by 26.4% on an annual compounded basis. In the same period we have increased our
dividend by 22.1% on an annual compound basis. This is an excellent record and
we hope that shareholders will be supportive of our proactive action to
accelerate the building of shareholder value as a publicly quoted company.'


Enquiries:

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

Finsbury       Gordon Simpson                       Tel:  [phone]



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