DEALER group Pendragon today confirmed that its anticipated full-year underlying pre-tax profit will be roughly £50 million – down £10 million on the figure that the market was expecting to see.
An interim management statement, which follows the trading update that was issued as a profit warning last Friday, said: ‘Given the introduction of the WLTP legislation in the new car business and our continued investment in our used car business in new start-up locations and “used car factories”, this has had a short-term dilutive effect on profitability.’
The statement from the company, whose chief executive is Trevor Finn, pictured, added: ‘We anticipate that our full-year underlying profit before tax will be approximately £50m.’
Analysts had expected profits to remain flat at £60 million.
There has been some good news for the automotive retailer, though. The statement, covering the period from July 1 to October 25 this year, said underlying profit before tax for the three months to the end of September was up £3 million on the third quarter of 2017 to £1.1 million, going from red to black.
Other like-for-like figures for the third quarter included group revenue down by 7.2 per cent and new revenue down by 9.1 per cent.
Used gross profit, however, was substantially up by 13.7 per cent – helped by what Pendragon said was a ‘strong recovery in used gross margin’.
The statement ended on a note of optimism, saying: ‘We are encouraged by the improving used performance across the group in quarter 3 of this year and this will be a key growth area for the business in 2019.’