9:59 am, June 27, 2019
STRUGGLING car dealer Pendragon has been rocked by new chief executive Mark Herbert driving off into the sunset less than three months after taking the top job.
Herbert, who only started working at Pendragon on April 1, left suddenly today by ‘mutual consent’ and will be gone by the weekend.
Analysts suggested there may have been a clash of opinions over how best to turn around the car business, which trades under the Evans Halshaw and Stratstone dealership brands, after a string a profit warnings.
Mark Herbert
Liberum analysts said: ‘While not explicit in the statement, the conclusion we draw from today’s announcement is that there may have been a difference of opinion on the level of change required.
‘From our perspective, we remain to be convinced on the Car Store stand-alone used car strategy, particularly given the business is expected to make a loss of £25m this year.’
Independent retail analysts Nick Bubb added of Herbert: ‘He is evidently fed up with the mess.’
A search is under way for a replacement, but chief operating officer Martin Casha and Mark Willis, the chief financial officer, who joined at the same time as Herbert, will run the business in the meantime, the company said.
The former boss had planned a major strategic update in September, but this has been ‘postponed’ until the new chief executive is found. There was no word initially from the company on how far the plans had progressed.
Chris Chambers, chairman of Pendragon, said: ‘The board remains fully committed to realising the long-term strategy.
‘In the nearer term, despite challenging market conditions and the costly stock reduction programme, our focus will remain on taking steps to improve the performance of the business as outlined in our recent financial and operational review.’
There was no initial comment from Herbert.
Shares fell 4.2 per cent to 16.96p – a seven-year low.
Earlier this month, Herbert revealed that losses at the company’s Car Store division would be £25 million this year – up from an £11.9 million loss in 2018.
First-quarter like-for-like gross profits slid 5.4 per cent on new cars, 1.6 per cent on used cars and five per cent on aftersales, which includes servicing and repairs.
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