Pendragon’s recently-appointed chief executive, Mark Herbert, will leave the business at the end of this month according to a statement issued via the London Stock Exchange.
Herbert, who has been in-post for just three months since taking the helm from the former AM100-topping group’s founder Trevor Finn, will officially leave the group on June 30, the statement said.
This morning (June 27), news of Herbert's imminent departure caused Pendragon's share price to fall 6.9% to 16.76p - its lowest level since November 2012.
Pendragon’s stock market statement said that Herbert’s departure had been a “mutual agreement” and revealed that the search for a replacement had already begun.
It added: “Until such an appointment is concluded, executive directors Martin Casha, chief operating officer, and Mark Willis, chief financial officer, will lead the business on a day-to-day basis, reporting to Chris Chambers, the chairman.”
Herbert leaves the Pendragon Group just a fortnight after he published the findings of a preliminary review of the group’s profitability and strategic focus in the face of ongoing slump in its financial fortunes.
The initial appraisal of the group's fortunes on June 12 caused its share price to fall 20.1%, from 23p to 18.2p.
In the group's statement of June 12, Pendragon said that it needed to refocus its Car Store used car supermarket strategy as it seeks out “self-help opportunities” in light of an operational business review which predicted that the group would make a significant loss in H1, 2019.
The results of an initial business review conducted by new chief executive Mark Herbert and his leadership team at the once AM100-topping group stated that it expected to be to be “significantly loss making” in the first half of the year, with a small loss in underlying pre-tax profits for 2019 as a whole.
Considering the performance of each of Pendragon’s areas of business on an “as is” basis, the group found that accelerated losses from the Car Store business, an excess of used car stock, lower than anticipated new car margins and increased costs – particularly in aftersales – would all hamper its 2019 performance.
A statement, issued via the London Stock Exchange, said that £11.9m losses incurred by the Car Store division in 2018 would accelerate to over £25m this year, principally as a result of “execution inefficiency and the impact of excess used car stock”.
Pendragon held £458m worth of used car stock at the end of 2018, compared to £372m a year earlier
An accelerated programme during the second quarter of 2019 will now aim to reduce the level of aged, pre-reg and ex-demonstrator stock to 38% of used stock units held on April 1.
Herbert had suggested there was a route back to profitability for the business, however. He said: “We are continuing to work on our review of the business ahead of our strategic update in September, but I am confident there are real opportunities for self-help that will improve the performance of the core UK Motor and Leasing businesses.
“In the short-term, there is a need for a refocus of strategy and execution in Car Store but I believe this, together with Pinewood, to be significant long-term market opportunities that we should be pursuing with vigour.”
Prior to joining Pendragon, Herbert had been employed by the with Jardine Matheson Group across a range of industries including Jardine Motors in the UK where he held positions as group finance director and chief executive officer for eight years.
Most recently, he had been running several retail operations for Jardine Matheson in Singapore and Cambodia.