Auto dealership operator Pendragon reported profits were up in the third quarter as used car sales continued to form the backbone of sales.

The firm said underlying trading performance remained in line with expectations for the full year.

Operating profit was up by £1.5m in quarter three compared with the prior year, including growth of £0.4m at its wholesale business, Quicks. Aftersales turnover was flat compared to 2011.

Pendragon said its gross profit margin of 60% was in line with the prior quarter, however overall gross profit was marginally down.

Like-for-like sales of used cars were up by 2.8%, with profit on those sales 11.7% ahead of the previous year.

The firm did not give a three month figure for new sales, instead saying that UK new retail sales, excluding Motability, for the nine months to the end of September increased by 12.3%.

"Used performance continues to be a differentiator for the group and we believe this will continue in the final quarter with further recovery in used margin," the trading statement said.

"The new retail car market has performed ahead of the comparator period throughout the year and we expect that to continue in the fourth quarter. Aftersales performance remains resilient."

It added that progress on debt reduction was in line with expectations for the year end.

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