OREANDA-NEWS. February 18, 2015. Britain's largest car dealership Pendragon Plc has sharply raised its dividends after strong demand for used cars online helped it post profits and earnings per share up by more than a third in 2014.

Its shares built on recent gains to touch a 16-month high of 39.75 pence and were up 1.3 percent at 39p by 0909 GMT.

The group, whose brands include Evans Halshaw and Stratstone, doubled its proposed final dividend for 2014 to 0.6 pence and said it expected the 2015 interim payout to increase by the same amount.

Pendragon posted an underlying 36 percent rise in pretax profit to 60.2 million pounds (\\$92.6 million), while earnings per share increased to 3.1 pence from 2.3 pence. Revenue rose 3.9 percent to 4 billion pounds.

Chief Executive Trevor Finn said on Tuesday the growth of the group's car servicing business and a focus on user car sales were behind the improved profits, since used cars carry higher margins for dealers than new models.

Finn said Evans Halshaw's launch of its "Move Me Closer" service this week, allowing customers to view any car in any dealership, could drive a further increase in used car sales.

"It works particularly well on used cars because they're unique items," he said.

Finn said the dividend increase was intended to convince investors that the company could comfortably finance the planned opening of 40 new dealerships over the coming years, mostly in southern England.

"We're comfortable that we can pull the dividend in from cash flow and profits," he said.

He said employment was the key economic indicator driving car sales and did not expect upcoming elections in May to impact the car market.