Losses expected at Pendragon

Mark Herbert

Nottingham-based Pendragon has said that as a result of a challenging market, with a decline in new car registrations, and internal operational challenges, it expects Group underlying profit before tax for FY19 to be a “small loss,” with the “first-half of FY19 expected to be significantly loss making ahead of returning to overall Group profitability for the second-half.”

The news follows a business by business review, conducted by Pendragon’s newly appointed management team, to determine the expected underlying operating performance for the remainder of the current financial year.

The review has analysed the expected performance of each individual component of the business across UK Motor, Car Store, Leasing, US Motor and Pinewood.

While the firm noted that the used car market presents an “exciting opportunity and provides significant potential for future profitable growth,” it expects to see the losses of £11.9m incurred in FY18 accelerate to £25m during FY19, as a result of execution inefficiency and the impact of excess used car stock during the first-half.

Mark Herbert, Chief Executive Officer, said: “Notwithstanding the challenging market and uncertain macro outlook, the expected loss for the year is still disappointing. That said, we see significant addressable opportunities to improve the business and return to profitable growth.

“We are continuing to work on our review of the business ahead of our strategic update in September, but I am confident there are real opportunities for self-help that will improve the performance of the core UK Motor and Leasing businesses.

“In the short-term, there is a need for a refocus of strategy and execution in Car Store but I believe this, together with Pinewood, to be significant long-term market opportunities that we should be pursuing with vigour.”