Motor retail group Pendragon has launched an internal review after its quarterly financial results revealed a “lower than expected” performance.

The results for the three months to 31 March 2019 revealed a 1.2% increase in total group revenues, with like-for-like growth of 4.6%. However like-for-like new gross profit dropped 5.4% and aftersales gross profit dipped 5%.

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Underlying loss before tax totalled £2.8m, which was £10m lower than the company’s expectations for the period – comprised of £7m from the impact of higher revenue and lower margins, £2m additional operating costs and £1m from the lower than expected performance of Car Store – the firm’s online marketplace.

Pendragon attributed the downturn to challenging trading conditions during the quarter, and said an operational review will take place as a result.

A statement read: “In light of this trading update and given the recent appointments to the business of both Mark Herbert (chief executive officer) and Mark Willis (chief financial officer), a review of the operational and financial prospects of the group is currently being undertaken.

“The results of this review will be communicated to the market during June. In addition, a strategic update will be provided with the interim results.”

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In the first six months of 2018, Pendragon saw its operating profits more than double year-on-year, reaching £6.1m.  The growth was driven by a 64% jump in leasing revenues, which hit £40.8m. The result partly offset the significant fall in the UK motor sales segment, where revenues were down 1.5% to £2.1bn and operating profit fell 45.4% to £237.4m.

Plans were announced to double used car revenues by 2021, expanding its Evans Halshaw brand to the whole of the UK. The firm highlighted leasing and online retail capabilities as two key sectors of focus to reach the target.