DROPPING residual values and cut-throat new car prices to tempt buyers back from the used market held back profits at motor retailer and accident repairer Perry Group. Profits before tax for the six months to June were virtually unchanged from 1997 at £4.9 million (1997: £4.85 million), blamed on the weak used car market.

Richard Allan, chairman of the Hertford-based company, said he expected difficult trading conditions to continue for the rest of the year. It is the latest in a number of firms to see profits hit by the slump in the used car market, most recently The Car Group, owner of National Car Supermarkets.

Despite the difficult conditions, Perry Group's wide portfolio of businesses helped turnover rise to £269.9 million (1997: £259.6 million) in the half year. Allan said: 'April, May and June proved to be difficult trading months. The new car market remains buoyant, but margins continue to reflect the competitive trading environment. The used car market has been weaker, with some potential buyers opting for one of the many special offers available on new cars.'