Pendragon predicts losses of £25m for Car Store brand
Pendragon, the Nottingham car dealership giant, says its Car Store arm will report losses of £25m by the end of this year.
Pendragon now says it expects to make a small loss for 2019, with the first-half of the year expected to be “significantly loss making” ahead of returning to overall Group profitability for the second-half.
The news comes after the company, which trades as Evans Halshaw and Stratstone, said it would undertake a “review of the operational and financial prospects” of the firm after posting a loss of £2.8m for the three months to 31 March.
Pendragon said the figure was around £10m lower than it expected and was brought about by “challenging trading conditions” over the period.
In a statement today (12 June), Pendragon said: “The used car market presents an exciting opportunity and provides significant potential for future profitable growth. However, we expect to see the losses of £11.9m incurred in FY18 accelerate to around£25m during FY19, principally as a result of execution inefficiency and the impact of excess used car stock during the first-half as described above. Significant management focus is currently being dedicated to the development of the Car Store strategy.”
Meanwhile, the firm’s Pinewood software offering is performing in line with expectations for the full-year. Pendragon says there is “further potential in the business” and is “developing growth plans accordingly”.
Mark Herbert, chief executive, added: “Notwithstanding the challenging market and uncertain macro outlook, the expected loss for the year is still disappointing.
“That said, we see significant addressable opportunities to improve the business and return to profitable growth.
“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.”