7:10 am, May 2, 2024
Pinewood Technologies Group has signed off on a ‘robust’ set of financial figures, following its major transformation over the past year.
Formerly Pendragon, the operation sold its UK motor and leasing divisions to Lithia Motors for £397m in a deal that was completed in January. Now a standalone business, Pinewood Technologies Group calls itself an automotive software-as-a-service (SaaS) operation.
The results listed on London Stock Exchange show business boomed over a 13-month period, ended January 31, 2024.
Core revenue (including intercompany amounts) was up 26% to £32m while gross profit rose 28% to £28.5m, giving a gross margin of 89%. Profit before tax rose from £7m to £9.9m in the period.
The sale to Lithia left Pinewood with a debt-free balance sheet, and from February it had £372m (net) in the bank. Some £358m of this will be dished out in a special dividend at 24.5p per share on May 7.
The results also showed that the sale to Lithia Motors netted a profit of £40.7m.
Looking ahead, Pinewood said it has signed a joint venture with Lithia Motors worth £10m, giving it access to the North American market.
Ian Filby, chairman of Pinewood Technologies Group PLC – who was due to stand down but a replacement has yet to be found due to the disposal of the UK motor and leasing divisions – said: ‘We are very pleased to be reporting the first set of financial results for Pinewood following the successful sale of Pendragon’s UK Motor and Leasing divisions to Lithia Motors.
‘Pinewood is a leading provider of cloud-based Dealer Management Software and we have made positive progress during the year to build on this market position.
‘We have continued to expand our customer base while sustaining high levels of customer retention, which is reflected in a net user churn rate of c.2%. This contributed to strong growth in revenue and profit in the period.’
He added: ‘We are excited by the opportunity that lies ahead for Pinewood as a standalone business. Following the transaction with Lithia, the business is in a robust financial position and is well positioned for growth through product innovation, user growth in existing territories and accessing the North American market in partnership with Lithia through a joint venture agreement.
‘We are confident in the quality of our products and our market proposition, and we are looking forward to making further progress in the year ahead.’
Speaking of the partnership with Lithia Motors for software provision, chief executive Bill Berman said: ‘We have an exciting new driver of growth through our strategic partnership with Lithia and we are looking forward to installing our system across their network in the US and UK.
‘Initially, the key pieces of work relating to expanding in the US are focused on integrations with manufacturer systems and other third party “layered apps” that are widely used in the US market. The development work will be done by our UK-based development team.
‘Once we are in a position to test in the US, it is likely we will run the Pinewood system in parallel with current systems in pilot locations before starting a full rollout across Lithia’s US stores.
‘Given the relatively early stage of development, exact timings have not been confirmed, although we are aiming to be testing in pilot locations in H1 FY25.’
