Pendragon will continue to pursue a strategy of growth by acquisition, chief executive Trevor Finn told the market after announcing poor 2007 financial results today.

Figures showed the group had made £34.8m profit before tax and exceptionals for the year, slightly better than the analysts had been led to expect but still half the level of the previous year.

After a year in which profit forecasts were slashed several times and commentators began to query the value of creating a car retail mega group, Finn has been extremely cautious about the outlook.

He has declined to predict the likely quality of trading saying that the recent changes to interest rates have failed to give a final flavour to consumer demand and that the visibility was very poor.

He does intend however to continue with acquisitions to grow the size of the group but has lowered his sights to “small in-fill acquisitions.” Pendragon’s expectation is that there could be many business failures that will allow cut-price acquisitions.

Shares fell again after the announcement by 4.3% to 33.5p valuing the company at £220m – a fraction of the cost of assembling the group in the first place.