8:47 am, September 21, 2022
Dealer group Pendragon has revealed its underlying pre-tax profit fell slightly to £33.5m in the first half of 2022.
Despite the dip, the Car Dealer Top 100 outfit saw revenues rise and margins improve during a strong start to the year.
Group revenue totalled £1.85bn in the six months to June 30, a 1.6 per cent improvement on the same period in 2021.
Despite that, the firm’s underlying pre-tax profit took a 4.6 per cent hit, falling from £35.1m in H1 2021 to £33.5m in the first half of this year.
That decline was largely down to reduced volumes in both new and used car sales. New volumes were down 17.5 per cent on a like-for-like basis, with used volumes falling by 13.7 per cent.
Despite that, margins remained strong for the group, with profit per unit increasing by £310 to £1,676 on used vehicles. New gross profit per unit increased by £956 to £2,576.
Overall, the firm brought in £948.9m from used car sales and £716.8m in the new car market. Aftersales generated a further £137.2m.
In the period covered by the accounts, Pendragon’s technology division, Pinewood, delivered multiple releases, which contributed to the financial results.
The firm also relaunched its CarStore.com brand, with a new cross channel marketing campaign unveiled in May.
Bill Berman, CEO of Pendragon, said: ‘We have made a really encouraging start to the year which is reflected in a strong set of financial results and continued momentum across the business.
‘Good progress has again been made in the delivery of our strategy, including the brand relaunch of our used car business and multiple technology releases by Pinewood.
‘We have transformed our digital capabilities over the past two years and this, combined with significant improvements to our operations, means we are well placed to offer our customers the best possible experience.
‘We have delivered these results in the face of challenging trading conditions in our sector due to supply constraints on both new and used vehicles and the impacts of inflationary pressures.
‘We expect the environment to remain challenging in the second half of the year, however we take confidence from how we have performed in the last six months and expect to make further positive progress towards our long-term goals this year.’
Experts hail ‘strong performance’
Pendragon’s performance has been described as ‘strong’ by expert analysts from leading financial services group, Zeus Capital.
The firm’s analysis found that the dealer group is on track to meet expectations on the year as a whole, despite ongoing supply chain issues which continue to dog the new car industry.
In a statement issued this morning, Zeus Capital said: ‘Pendragon’s interim results show underlying PBT of £33.5m (H1 2021: £35.1m), in line with the numbers flagged in a trading update on 20 July.
‘This is a strong performance given the removal of £8.3m of government support and £7.0m of incremental marketing spend to grow the used car proposition.
‘FY22 trading is expected to be in line with management’s expectations, despite macro uncertainty and supply shortages, so Zeus headline forecasts are unchanged.
‘We remain comfortable with our 38.6p per share SOTP valuation estimate.’
