9:19 am, January 29, 2020
CAR dealership Pendragon today cautioned 2019 pre-tax profits were set to come in around the bottom end of City expectations after election uncertainty weighed on consumer demand at the end of the year.
In a trading update for the financial year ending December 31, the beleaguered group – which last year announced hundreds of job cuts along with 22 Car Store closures following a multi-million-pound loss – said its franchised UK motor division was hit the hardest by the ‘challenging consumer environment’.
But it said its performance ‘improved significantly’ overall in the final six months.
In the update, the group – which trades under the Evans Halshaw and Stratstone brands – said it had benefited from action taken ‘to reset performance’, which included the axe falling on the ‘underperforming’ Car Stores as well as ‘better management of used vehicle inventory and a clear focus on operational cost management’.
It said: ‘The board remains confident that the improvement in performance during the second half puts the business on a much stronger footing as we enter 2020.’
Shares fell by three per cent to just over 11p this morning after the update.
As well as the Car Store closures, with the last of the 22 shutting its doors on October 18, the company also cut bonus payments for its executive directors. Its preparation centre in Stoke was shut the same month too, as part of the turnaround plans.
The group is still searching for a new chief executive following Mark Herbert’s departure last June, in the wake of a preliminary review of Pendragon’s profitability and strategic focus, after serving less than three months in the role.
It also remains without a permanent chairman, with Bill Berman continuing to serve in an acting capacity after being appointed last September to replace Chris Chambers. Non-executive director Richard Laxer also stepped down last September, with Brian Small replacing him in December.
Pendragon is aiming to issue its results for the financial year on March 18.
Picture: Peter Byrne/PA
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