7:55 am, October 25, 2022
Pendragon has posted a pre-tax profit of £14.7m in the third quarter and has said it’s on course to meet full-year expectations.
An interim statement posted on the London Stock Exchange this morning (Oct 25) showed the listed dealer group posted robust margins and impressive new car sales in Q3.
Analysts said that recent shareholder activity between the Pendragon board and Hedin Group highlights the ‘value’ in the firm.
Pre-tax profit came to £14.7m in Q3 – down from the £25.1m the company made in the same period last year, but the first half of 2022 made a strong £33.5m.
Pendragon said the performance benefited from ‘continued progress in the delivery of our strategy to transform automotive retail through digital innovation and operational excellence’.
New car sales in the market were down by 0.1 per cent in Q3, but Pendragon’s new car numbers were up 14.2 per cent.
New gross profit per unit (GPU) came to £2,597 during the quarter – up by £743 on the same period last year.
The business – which runs dealerships under the Stratstone and Evans Halshaw names – said it had an order bank of 20,000 new cars in the third quarter, ‘well above historic normal levels’.
Similarly with other listed dealer groups, including Vertu and Lookers, used car volumes were down in Q3 as was GPU – £1,561 compared to £2,052 in Q3 2021.
The interim results also showed that the business’s aftersales revenue and gross margin were both higher than in the prior year, with revenue up five per cent, margin rate up to 51.7 per cent (Q3 21: 50.3 per cent) and gross profit up 7.8 per cent as a result.
Pendragon also said its leasing and software businesses were performing ‘broadly in line with Q3 2021’.
Pendragon CEO Bill Berman said: ‘We are encouraged that the momentum we saw going into the second half has continued throughout the third quarter.
‘Our agile and diversified business model positions the business well to respond to the uncertain environment, as demonstrated by the outperformance in new vehicles and the strong margin profile of the broader UK motor division.
‘While supply chain challenges and other market pressures are set to persist, we are confident we have the right strategy in place to deliver for our customers and partners, and to meet our expectations for the full year.’
Analysts Zeus Capital said it won’t be changing its forecasts for Pendragon, although ‘with only £7.1m of PBT to achieve in Q4 to meet FY22 estimates, leaving our numbers unchanged may prove to be conservative’, it said in a report.
Zeus also said that despite the company being held to a $60m ransom last week, due to the dealer group’s ability to continuing operating, again it would be making no changes to its forecasts.
