8:27 am, March 22, 2023
Pendragon delivered a ‘resilient’ performance in 2022 it has said, despite a dip in pre-tax profit.
The listed dealer group published its full-year results for 2022 this morning (Mar 22) via the London Stock Exchange.
The results showed like-for-like revenue grew by 6.7 per cent from £3.5bn in 2021 to £3.6bn in 2022.
Underlying profit before tax, however, slumped by over 30 per cent from a record £83m in 2021 to £57.6m last year.
The company insisted the figure was ahead of expectations at the start of 2022, but was lower than 2021’s record total due to ‘higher than expected’ gross profits from ‘strategic self-help initiatives’ and strong new car margins.
Combined, these outpaced higher than expected levels of cost inflation and interest charges, said Pendragon.
2021’s record £83m was up 912.2 per cent on the £8.2m profit the firm made in 2020, most due to a ‘unique set of trading circumstances’ it said at the time.
In its franchised motor retail division – which includes Stratstone and Evans Halshaw – revenue grew 6.1 per cent from £3.33bn to £3.53bn – up seven per cent like for like.
Underlying operating profit fell by nearly 21 per cent, however, from £87.4m to £69.1m.
Pendragon sold fewer new and used cars in 2022 – 48,773 new cars compared to 52,285 in 2021, and 89,355 used cars to 2021’s 98,326, representing like-for-like differences of -6.1 per cent and -8.7 per cent respectively.
Used vehicle gross profit remained strong, falling marginally from £1,670 in 2021 to £1,607 in 2022.
New vehicle gross profit, meanwhile, rose by £808 to a record high of £2,719.
Pendragon’s relaunched CarStore.com operation saw digital traffic rise by 61 per cent year on year, and the company said it now stocks around 12,000 used cars.
It opened the first of its ‘new model Car Store’ physical sites in Chesterfield in April 2022, and another in Warrington in December 2022.
Meanwhile, its software division Pinewood saw revenue rise by 4.1 per cent to £25.4m. Gross profit was up 0.9 per cent while operating profit was down 12 per cent ‘principally driven by investment in developer resource’.
During the year Pendragon opened remodelled BMW showrooms in Derby and Hull, invested in its Hull Mercedes-Benz dealership, and worked with Land Rover on its Stratstone Mayfair ’boutique’ showroom.
It was also the subject of a highly publicised takeover bid by Hedin Group and faced a $313m (£260m) claim from a reseller of its Pinewood technology. The latter was rumoured to be the reason why Hedin walked away from the takeover deal, according to sources.
Pendragon announced earlier this month it was the UK launch partner for the Chinese brand BYD and is opening two dealerships.
CEO Bill Berman said: ‘We delivered a resilient trading performance against a challenging backdrop last year.
‘These results clearly demonstrate the strength of our operations, and it is all underpinned by the great strides we are making against our strategy which ensures we are well placed to meet the needs of our customers and OEM partners, and to create value for all of our stakeholders.’
Looking ahead, Berman added: ‘We finished FY22 with good momentum, and trading has been positive in the first two months of FY23.
‘We remain mindful of the potential headwinds from challenging macro-economic conditions.
‘However, we continue to expect our ongoing operational initiatives and growth opportunities to more than offset operating cost inflation within the business this year and the board remains confident in the prospects for the group in 2023.’
