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Pendragon confirms 500 job losses

Pendragon has finally confirmed that it has made 500 jobs cuts, or 3% of its 16,000 strong workforce, in order to aid the group on the way to its financial recovery.

Speculation regarding the redundancies has been rife for several months, with industry insiders quoting the job losses as high as 2,000.

When AM spoke to Pendragon about the job cuts, the company would only previously confirm they were on a small scale.

In an announcement to the City, Pendragon said it continues to be profitable and cash-generative despite "volatile market conditions".

The dealer group said: "Sales volumes have remained robust relative to the market and aftersales has continued to perform well."

Pendragon is expecting sales of new and used cars will continue to decline for the rest of the year after experiencing low levels in May and June.

The group's share price has been in free fall since early May this year, with shares valued at 14.5p this morning, giving it a market capitalisation of £95.12m. On July 5, 2007 Pendragon's share price was at 82.75p per share.

Broker Panmure Gordon told the Financial Times this morning it has little confidence in its profit estimates for Pendragon, and its shares are now a "high risk recovery story".

Pendragon will announce its 2008 interim results on August 28.

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