Pendragon PLC has released an Interim Management Statement covering the period from 1 July 2017 to 20 October 2017. The business reports revenue growth at 3.7% in the period on a like for like basis. However new, used and, aftersales profits declined during the period.
The trading update estimates that the firm’s underlying profit before tax will now be approximately £60m, significantly lower than the £75m achieved in 2016.For the year to date Pendragon’s revenue has grown by 6.7% on a like for like basis with used revenue growth of 21.1%. Gross profit achieved from New vehicle sales, reduced by 20.7% in the period July-September on a like for like basis. For the year to date new sales gross profit has reduced by 10.2% on a like for like basis. For the year to date used gross profit has increased by 2.1% on a like for like basis. Aftersales gross profit reduced by 3.0% in the period on a like for like basis with one working day less in the period. For the year to date the firm’s aftersales gross profit has grown by 3.0% on a like for like basis.
It may not come as a surprise, that arrangements in the light of the current new vehicle sales slowdown and the recent premium used price adjustment, Pendragon is taking a detailed look at its franchise: “We are conducting a strategic review of the premium brands, to evaluate by manufacturer the investment appeal of their franchise proposition. We will review capital requirements by manufacturer and only allocate capital where we see strong future prospects for reliable returns.”
The statement also signals an increased focus, by the UK’s largest automotive retail group, on software and online technologies offered via its Pinewood business.
Trevor Finn, Chief Executive: "Following a strategic review, the Board is now committed to focusing on reshaping the business to accelerate transformation. We are placing our software and online technologies at the heart of our business as a platform to fulfil customers' vehicle and servicing needs. We believe this strategy will provide more reliable and sustainable returns."
Along side the redouble focus on its software offering via the Pinewood business, Pendragon confirms it will continue to pursue its goal to double used car revenue over the five years to 2021.