7:45 am, October 7, 2021
Dealer group Pendragon has announced improved predictions for the year with the firm now expecting to make around £70m.
Pendragon bosses say that a strong first three quarters to 2021 has led them to revise their financial forecasts for the year.
The Car Dealer Top 100 group is now expecting to see a pre-tax profit of around £70m.
Up until the announcement, Pendragon had been predicting a profit of between £55m and £60m.
The revised figures come after performance remained strong during the third quarter, despite the shortfalls in new vehicle supply
These were mitigated by strong gross profit in both new and used cars. The dealer group also made a number of efficiency savings to keep profit margins high.
Throughout the third quarter, Pendragon saw the level of new vehicle order-take remain higher than the same period last year.
However, the well-documented challenges to new car supply, combined with lower levels of opening inventory, have resulted in a reduction in the level of vehicle deliveries achieved.
The firm has been hit by the fact new car registrations fell by 35 per cent in September, traditionally one of the strongest months.
A number of the volume brands represented by Pendragon were even more heavily impacted.
However, new car margins have remained strong as a result of supply shortages, which has helped to mitigate the volume shortfall, say bosses.
The group’s used car division has also seen unprecedented demand as the industry continues to experience a once-in-a-lifetime boom.
A spokesman for Pendragon said: ‘We remain cautious about potential further disruption from Covid-19 to both our local markets and global supply chains, and, despite our broad range of sourcing channels, the impact from ongoing shortfalls in both new and used vehicle supply for the remainder of this financial year.
‘Whilst we also continue to expect a realignment of used vehicle margins over time, we expect these to remain strong for the remainder of this financial year, providing us with some mitigation to lower new vehicle volumes in particular.
‘Our strong year to date financial performance, together with these factors, means that we now expect group underlying profit before tax for FY21 to be approximately £70.0m.
‘The Board continues to believe the group’s strategy positions itself well to respond to the ongoing market uncertainty and to capitalise on any resultant opportunities.’
