Pendragon upbeat despite full-year profits gloom
29 January 2020, 10:34
The group said annual underlying profits are expected to be around the bottom end of City forecasts.
Car dealership Pendragon has warned that 2019 profits are set to come in around the bottom end of forecasts after election uncertainty weighed on consumer demand.
The group – which trades under the Evans Halshaw and Stratstone brands – said its franchised UK motor division was hit the hardest by the “challenging consumer environment” in the final quarter of the year.
But it said its performance “improved significantly” overall in the final six months.
“The board remains confident that the improvement in performance during the second half puts the business on a much stronger footing as we enter 2020,” the group said.
Shares fell 3% on Wednesday morning after the update.
Pendragon had cheered a tripling in underlying pre-tax profits to more than £3 million in the third quarter from £1.1 million a year earlier as bosses controlled costs by slashing bonuses and shutting showrooms in the face of Brexit.
The company cut bonus payments for executive directors and closed 22 of its Car Stores, with the last shutting their doors on October 18.
It also recently revealed that it is closing a preparation centre in Stoke as part of turnaround plans as the group battles against a dismal car market.
New car sales sank to a six-year low in 2019 due to low consumer confidence and uncertainty over the treatment of diesel vehicles.
Figures released by trade body the Society of Motor Manufacturers and Traders (SMMT) show 2.3 million new cars were registered in the UK in 2019, down 2.4% on the previous 12 months.
It marked the third consecutive year of decline and the lowest annual total since 2013.