8:26 am, May 21, 2020
The UK’s largest car dealer group Pendragon made a loss of £2.3m in the first quarter of this year – but it says it is gaining ground on the losses it has made previously.
In a Stock Market trading update this morning the group said that profit before tax was impacted by £10m by the crisis in the quarter.
The overall loss of £2.3m is still an improvement on the same quarter last year, though, when Pendragon recorded a £2.8m loss.
Profit in its UK dealers was £4.4m for the first quarter – down from £4.7m last year – with like-for-like new car sales down 19.1 per cent.
Its Car Store business recorded a loss of £1m for the same period – but that was down from a £7m loss recorded in the same period in 2019.
It said that during the lockdown it has continued to take telephone sales too – and so far 3,610 cars have been sold and 1,187 of those have been delivered to customers’ homes.
The group is continuing to role out ‘omni-channel’ sales offers and home deliveries are being offered for used models on its Car Store website.
CEO Bill Berman – who will be talking to us on Car Dealer Live tomorrow at midday – said: ‘The actions we took during the second half of 2019 to focus on costs and to reduce used stock levels started to show results both during that period and on into the first quarter of 2020, resulting in increased profitability in Q1, despite the impact of the pandemic.
‘The commercial consequences of a full lockdown have obviously affected the business, but we moved quickly to implement a broad range of actions to mitigate the enforced closure, and I am confident that we will emerge in a strong position as the current restrictions ease.
‘We are now preparing to reopen from June 1 and will therefore have the capabilities in place to meet the full needs of our customers across new, used and aftersales.’
Pendragon initially reopened, with new safety procedures, around 20 service centres during April (out of a total of 145), to either service or repair vehicles for key workers or for customers who depend upon having access to a vehicle.
Now demand has restarted it has begun to reopen other service centres with 125 open as of today.
These are operating at reduced capacity with just 20 per cent of the normal number of technicians. Aftersales revenue is down by 17 per cent on the same week last year, said the group.
Pendragon says it has worked hard to protect its cash position by utilising business rates holidays, VAT deferrals and wide use of the government’s furlough scheme – with 80 per cent of its staff on furlough at its peak.
Directors and senior management have taken a pay cut of 20 per cent and net debt, as of yesterday, was £100.5m against a total facility of £235m. That debt has dropped from £119.7m as at the end of 2019.
Pendragon is now working hard to reopen its dealerships and is hopeful that June 1 will see its sites restart business.
The statement added: ‘The business has worked hard to be in a position to implement measures and plans to safely reopen locations as permitted or appropriate.
‘These strict new measures will allow dealerships to operate through the introduction of ways of working that enable social distancing and will include changes to both operational methods and physical layout within dealerships.
‘The board is confident colleagues will be provided with a safe environment in which to work and that customers are provided with a safe environment in which to shop. The group will also continue to develop its digital propositions for customers who choose to shop for their next car online.
‘It is currently expected that dealerships will be able to open, with compliant social distancing measures, from June 1, and the group will work with trade bodies and OEM partners as the situation develops to enable this to happen safely and effectively.’
In an update this afternoon (1300), the proposed pay plan for Pendragon – which could see Berman earn £2.2m a year – faced investor rebellion at AGM. Read the full story here.
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