Pendragon has signed off 2021 with a ‘record’ profit before tax of £83m.
The full-year results, released on the London Stock Exchange this morning (Mar 23), show the listed dealer group post a stellar set of results despite ‘a unique set of trading conditions’, it said.
Group revenue totalled £3.44bn – up 18 per cent or 27.1 per cent like-for-like, on 2020’s £2.92bn
Underlying profit before tax came to £83m, up 912.2 per cent on the £8.2m profit the year before – a ‘record’ performance, Pendragon said.
In its franchised motor retail division, revenue grew by 23.1 per cent to £3.19bn – up 26.7 per cent like-for-like on 2020’s £2.59bn.
Underlying operating profit was up 363.8 per cent to £85.8m (£18.5m in 2020).
Pendragon said performance was ‘strong’ during H1 2021, despite the lockdown with affected the industry in Q1.
An operating profit of £37.6m was recorded for Q1 2021 against a a loss of £18.1m in the same period in 2020.
In H2 2021, operating profit shot to £48.2m (£36.6m in Q2 2020).
For the whole of 2021, Pendragon’s motor retail division – which consists of the Evans Halshaw and Stratstone brands – reported an operating profit after non-underlying items of £81.3m (FY20: operating losses of £11.6m).
The company said it recorded increased gross margins in all areas; used cars were 9.7 per cent, new cars were 7.3 per cent, and its aftersales margin was 50.7 per cent.
Used car profit per unit increased by £530 to £1,730 while new was up by £463 to £1,911.
New car sales were down by 2.1 per cent like-for-like while uses cars were up 13.1 per cent like-for-like.
Pendragon’s CarStore business saw revenues increase by just under 60 per cent to £141.5m, with an underlying operating profit of £1.6m.
The company said CarStore’s ‘first profitable’ full-year leaves the division ‘well-positioned to deliver future growth ambitions’.
CarStore’s gross margins rose to 9.1 per cent (8.2 per cent in 2020), while gross profit per unit was £1,221 (£865 in 2020).
During the year, CarStore launched a new website where customers could transact online.
Used used volume was up 26 per cent like-for-like.
Meanwhile, its software division Pinewood saw revenue grow by 9.4 per cent to £24.4m, and revenues grew by 4.2 per cent to £89.9m for its leasing business, Pendragon Vehicle Management.
During 2021, Pendragon completed its sale of its US motor division to the tune of £106m since the sell-off began in 2018.
Commenting on the results, Pendragon CEO Bill Berman said:
‘We have delivered a really strong set of results, with positive contributions from all parts of our business.
‘Late in 2020, we set out our new strategy to transform our operations and adapt to the fast-changing retail environment. Our focus since then has been on creating value through the delivery of this strategy and we are seeing the operational and financial benefits of this hard work in our results today.
‘Our sector has experienced a unique set of trading conditions during the period and I am delighted with how we have performed in this environment. We have made the most of the favourable market dynamics to deliver record underlying profits and we have also reported a return to profit for CarStore, our relaunched, used car brand.
‘We expect existing supply chain constraints to continue in the current year, and we are mindful of the potential for further disruption to new vehicle supply chains as a result of the conflict in Ukraine.
‘Despite this, we have the right strategy in place and we expect to make positive progress towards our long-term goals this year.’
Zeus Capital analyst Mike Allen said: ‘The group has capitalised on favourable trading conditions, as well as executing its strategy to reduce costs and improve efficiency.
‘We remain confident that Pendragon will successfully navigate ongoing supply issues and deliver against its strategic goals.’
The results come as Pendragon’s leading shareholder makes moves to acquire the business.
Last week, as reported by Car Dealer, news came that Pendragon had recently thrown out a £400m bid from Hedin Group.
Chief executive Anders Hedin, who’s one of Pendragon’s biggest critics, made a secretive offer a few weeks ago via subsidiary Hedin Bil at 28p a share, according to Sky News.
But it’s believed Pendragon’s shareholders weren’t told about it and the board rejected it.