Pendragon has claimed that its performance “improved significantly” during the second half of 2019, as it carried out the closure of 22 of its nationwide Car Store used car dealership sites.
In a trading update for the financial year ended December 31, 2019, issued via the London Stock Exchange today (January 29), the former AM100-topping retail group said that its fortunes had improved despite challenging market conditions and weakened consumer demand in the run up to the General Election.
Despite the more positive outlook, however, the group said that its underlying profit before tax for 2019 is expected to be “around the bottom end of current expectations”.
It stated: “The period benefitted from the actions taken by management to re-set performance, as outlined at the Group's interim results, which included the closure of 22 underperforming Car Store locations, better management of used vehicle inventory and a clear focus on operational cost management.”
The group made no mention of its recent announcement about the closure of several of its Evans Halshaw Vauxhall dealership locations as part of the PSA Group-owned brand’s plan to shrink its UK retail network, as reported by AM last week
Neither did the update give more detail of the group’s network investments - including a new Porsche Centre in Stockport, a planned new facility near Nottingham - or its ongoing search for a replacement for chief executive Mark Herbert.
Back in September last year AM was told that the group would not provide “ongoing commentary” about its progress in appointing a new chief executive.
Pendragon’s statement said that its Car Store, Leasing, Pinewood and US Motor divisions had all performed “in-line with expectations”, with the challenging consumer environment in the final quarter of the year principally impacting the Franchised UK Motor division.
Pendragon’s statement concluded: “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.”
Back in October Pendragon delivered an interim statement to share news of a 57.9% growth in underlying profit before tax as revenues and profits continued to decline amid mass site closures during Q3.
Reporting its financial performance during the period from July 1 to September 30, 2019, the group said that underlying profit before tax of £3m represented an increase of £1.9m year-on-year (Q3 2018: £1.1m).
But as its revenues from new car sales rose by 11% and aftersales revenues rose by 0.7% on a like-for-like basis during the period, group revenues slipped by a further 3.6% as revenues from used car sales declined by 16.7%, it said.
Gross profit from new cars rose by 2% like-for-like but suffered a 17.3% decline in used cars and 2.4% decline in aftersales, meanwhile.
Pendragon intends to issue its results for the financial year ended December 31, 2019, on March 18.