8:46 am, November 16, 2023
Hedin Mobility Group saw its operational earnings and net profit fall during the third quarter.
The Swedish car dealership outfit – which last month pulled out of a joint bid with Penske to buy Pendragon – said that during the three months to September 30, its year-on-year operational earnings went down by 33m Swedish crowns (£2.5m) from 489m crowns (£37.5m) to 456m crowns (£35m).
Meanwhile, its net profit for the period plummeted by 27% from 379m crowns (£29m) to 278m crowns (£21.3m), it said in a newly published report.
That was on net sales that rose by 56% from 12.957bn crowns (£991.6m) to 20.25bn crowns (£1.55bn), although Hedin said that once they were adjusted for acquisitions and exchange rate changes, they went up by 14% for comparable units.
Its margins were similarly squeezed, dropping by half a percentage point to 3.1% over the three months, with the blame levelled at lower volumes, currency effects and start-up costs in its new distribution operations and market establishments.
In its interim report for January 1 to the end of September, the group posted a net profit fall from 1.402bn crowns (£107.4m) to 830m crowns (£63.6m) for the nine months.
Operational earnings dropped from 1.363bn crowns (£104.4m) to 1.206bn crowns (£92.36m).
Net sales rose by 65% from 35.075bn crowns (£2.69bn) to 57,703bn crowns (£4.4bn), although once adjusted for acquisitions and exchange rate changes, it was also a 14% increase for comparable units.
As the largest shareholder in Pendragon, the group said it’ll receive a dividend of some £95m after the sale of Pendragon to Lithia Motors is completed.
Its shareholding in Pendragon is expected to drop to some 23% as a result of the takeover, it said. It currently holds 26% of Pendragon’s stock.
Hedin has been looking to expand in the UK, buying the Stephen James Group in the summer, pictured, which saw it bolster its position as one of Europe’s largest retailers of BMW and Mini.
That followed its purchase of four Mercedes-Benz dealerships in London in April plus its announcement in June that it was looking to raise some £110m for future acquisitions.
Commenting on the latest results, CEO Anders Hedin said: ‘We continue to grow organically in the third quarter.
‘Adjusted for acquisitions and other items affecting comparability, net sales increased by 14% year-on-year both in the third quarter and in the first nine months.
‘However, margins continue to be squeezed by lower volumes, currency effects and start-up costs in our new distribution operations and market establishments.
‘In the short term, we are working intensively on various initiatives to increase volumes and profitability.
‘In the longer term, we are convinced that with our broad operations and geographical presence we are well positioned to take advantage of the opportunities that tomorrow’s mobility business will bring.’
He added: ‘We are fully focused on developing our wholly owned business in the UK…to grow in this significant market.
‘Since August, we represent Mercedes-Benz, Smart, BMW and Mini with a total of 14 sales points and nine workshops in the London region.’
Hedin said: ‘Demand in several of our markets remains weak, but despite the economic situation, order intake increased slightly compared to the previous quarter.
‘The order book remains large, although it decreased during the quarter as supply has improved. At the end of the quarter, we had an order backlog totalling approximately 33,000 vehicles.’
