Pendragon blames UK motor division performance for 41.4 per cent drop in profit

Pendragon blames UK motor division performance for 41.4 per cent drop in profit

PENDRAGON PLC’s half-year results ending June 30 show profits before tax fell by £20.1m to £28.4m due to UK motor division performance. 

In the figures released this morning for the first six months of 2018, group revenue was down 0.9 per cent like-for-like, but up 0.2 per cent in total.

Used revenue was down 0.9 per cent like-for-like (up 1.2 per cent total), while gross profit dropped 16.1 per cent like-for-like (down 14.3 per cent total).

New vehicle revenue fell 1.7 per cent like-for-like (down 1.6 per cent total), outperforming the market as a whole, which was down 6.3 per cent. Gross profit was down six per cent like-for like (down 5.9 per cent total).

Aftersales were also down 2.4 per cent like-for-like (down 2.3 per cent total), while gross profits were down 2.7 per cent like-for-like (down 3.2 per cent total).

However, the company announced plans to double its used car revenue by 2021, having appointed an experienced used car director to manage the operation of its used Car Stores; opened Car Stores in Norwich, Shrewsbury and Ipswich; opened two used car refurbishment centres, with intent to add another two this year; and closed in-house refurbishment centres at Car Stores.

The firm’s US motor group saw its first disposal of a US franchise. Back in the UK, the company released £26m by selling four premium brand franchises. Pendragon also further rolled out its software as a service licenses around the world.

Trevor Finn, chief executive of Pendragon, commented: ‘We are gaining momentum as we lead the transformation to fully online used car retailing. This will give us greater self-determination and deliver more reliable, sustainable earnings.

‘Our industry leading software company gives us unique technology and expertise, to reformat our business model. We are also continuing to reallocate our capital into higher return areas to increase shareholder value. Underlying profit before tax was £28.4 million for the first half and we remain in line with expectations.’

MORE: Pendragon sees new vehicle revenue fall more than 13 per cent in first three months of 2018

MORE: Profits and new car sales fall at Pendragon in 2017

MORE: Pendragon announces sale of US motor group

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