11:15 am, March 12, 2019
PENDRAGON suffered a pre-tax loss of £44.4m for 2018 with revenue for the group falling 2.4 per cent to a total of £4.63bn, it was revealed today.
The firm also reported that it had written down its assets at £95.8m, following another tough year for the dealership group, in its annual results for the year ending December 31, 2018.
The condition of the UK motoring industry was among the reasons provided for the poor year when the firm released its report this morning.
In 2017, profits fell by £15m to £60.4m but the new car market’s inability to recover has now led to further losses with a 10.1 per cent reduction in gross profit in this sector, with aftersales also seeing a 5.1 per cent drop.
In the used market gross profit grew from £156.3m to £164.2m year-on-year, up 5.1 per cent. The report states that the used market is ‘more stable and provides a more reliable supply chain than the new vehicle sector’.
Revenue in its Car Store used car supermarket business grew by £83.6m – an increase of 38.5 per cent – while gross profit was up 42.2 per cent. However, accounting for the impact of start-up and transformation costs, the operating loss for the business was £11.9m.
The report adds that it believes the market will be ‘broadly flat’ in 2019.
The firm’s presence in the United States is set to be wound up, with one Aston Martin dealership already being sold.
Pendragon chief executive Trevor Finn, pictured, who is to retire as chief executive this month, said: ‘We continue to focus on our strategic priorities and the reallocation of our capital into the areas we see as providing the strongest long-term growth.
‘We have seen strong performance in used cars in the second half of the year, with the transformation of preparation facilities and processes now embedded in our Car Stores. We anticipate this will carry on into 2019 and beyond as our new Car Store businesses further boost our used car growth.
‘New car sales have been subdued and consumer confidence has been adversely affected in the period by macro news flow. However, our software business is continuing to win market share and has now deployed systems in 12 overseas countries. Our leasing business has grown profitability with a stable base of vehicles under management.’
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