Pendragon shares slump to near-11 year low on losses and Covid-19 warning
18 March 2020, 10:44
The car dealership swung to an underlying pre-tax loss of £16.4 million in 2019, against profits of £47.8 million the previous year.
Car dealership Pendragon has seen its shares slump to their lowest level in nearly 11 years after posting an annual loss and warning the coronavirus outbreak is set to see customers stay away from showrooms.
Shares in the group – which owns brands including Evans Halshaw and Stratstone – plunged as much as 33% at one stage on disappointment over hefty annual losses and as it said it was likely to see reduced footfall amid the Covid-19 outbreak.
Shares later stood around 16% lower.
It said it was putting spending plans on ice as part of plans to mitigate an expected hit from the outbreak, but added it was too early to estimate any financial impact.
Pendragon swung to an underlying pre-tax loss of £16.4 million in 2019, against profits of £47.8 million the previous year.
It said: “As the virus spreads across the UK, then this will likely influence the willingness of customers to visit our dealerships, which could affect our financial performance.”
The group confirmed some manufacturers have announced short-term shutdowns to their production facilities, but added many have inventory buffers of several months, which means disruption should be delayed to the autumn.
The results show a marked improvement in the final six months, with underlying profits of £15.8 million against first-half losses of £32.2 million as it took drastic turnaround action.
Like-for-like sales of new cars held firm over the year, helping offset a 1.1% fall in used car sales.
Last year, it cut around 300 jobs as part of plans to shut a raft of Car Store showrooms.
It hired Bill Berman – who had been acting as interim executive chairman – as its new chief executive in February, weeks after it warned over profits.
His predecessor Mark Herbert left the firm in June after just three months in the role.
Mr Berman said: “2019 was a year of transition for the group that played out against challenging market conditions, however, we returned to profitable growth in the second half and this provides us with a solid platform for the coming year.
“At the moment, we are closely monitoring the impact of Covid-19 on the economy as the situation continues to develop.”