Analyst expects strong H1 results from Pendragon

Pendragon PLC is the largest independent operator of franchised motor car dealerships in the UK with a turnover of in excess of £3 billion tops the AM100.

Pendragon sells a broad range of makes of motor cars and commercial vehicles. It also has a substantial presence in the UK vehicle leasing, wholesale parts and dealer management software markets.

Pendragon became a public limited company when the vehicle division of Williams plc was de-merged in 1989, at that time operating 19 car dealerships, representing specialist and luxury franchises, in addition to a small contract hire business.

It now represents more 20 brands operating out of over 300 outlets in the UK and in California, USA.

Covering both specialist and volume brands our largest representation is with Ford and is closely followed by Vauxhall where we are the largest retailer in the UK.

The group’s specialist marques range from Maserati to Mercedes-Benz, Pendragon is the largest franchised dealer for Harley Davidson outside of the USA. It also runs the Evans Halshaw (volume brands) and Stratstone (premium brands).

Chatfields is Pendragon’s commercial van and truck business.

The focus of the business, led by Trevor Finn, is now on “bigger relationships with fewer manufacturers”. He said in February 2012: “The future will see us consolidating and remaining at the forefront of our industry.”

For many years Pendragon has been cutting back sites and staff numbers as it strives to reduce its debts and tackle its pension deficit.

In 2011 it announced a rights issue aimed at raising £70 million. It has secured new credit facilities with bankers until June 2014 conditional on the £70m being used to tackle debts.

In February 2013 full year financial results saw turnover increase by 5% to £3.63 billion and profit before tax rise by 58% from £24 million to £37.8m in 2012, which analysts believed indicated the recovery of the automotive market.

Despite the improvement in PBT and turnover, operating profit at the group was down by 13% from £78m to £67.9m.

Pendragon also appointed its new chairman with full year results. Mel Egglenton will take up the role of chairman for the group from May 22.

He succeeds Mike Davies, who will retire from the board and as chairman at the May 22, 2013 AGM after eight years as a non-executive director.