PENDRAGON PLC has announced that it will sell its US motor group in a bid to turn the business around.
The sale of the US arm of Pendragon, branded Hornburg, is expected to generate proceeds of £100m before tax.
In October, the company warned through its interim statement that profits would be reduced in 2017, down to £60m compared with last year’s figure of £75.4m. This resulted in share prices falling by a fifth.
The company revealed its new strategy today in response to this. It also announced that it will reduce its premium brand franchises over the next three years.
The group added that it planned to release £100m of capital ‘through a mixture of disposal proceeds and investment not deployed over the next three years’.
Used cars remain the core of Pendragon’s business, and it added in the statement that it still intended to double used car revenue by 2021.
Chief executive Trevor Finn, pictured, said: ‘Following our strategic review, we have focused on reshaping the business to accelerate transformation and ensure capital allocation is optimised across the group.
‘The actions I am announcing today are a further step towards achieving our strategic objectives.’
He added: ‘I believe this strategy will provide more reliable and sustainable returns.’
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