Pendragon misses £50m profit prediction
Pendragon has taken a £92.2 million write-down of goodwill due to “market conditions”, failed to hit its own £50m underlying profit prediction and has seen its profit before tax figure drop to a loss of £44.4m in its 2018 full-year results.
The group’s total underlying profit was £47.8m last year, down £12.6m on 2017, a 20.9% drop.
Total revenue for the UK motor retail division was down 4.0% to £4.07bn in 2018 with operating margin down to 1.0% from 1.2% in the previous year.
In the Pendragon’s UK retail business all three areas (new, used and aftersales) saw revenues fall.
Commenting on the results outgoing chief executive Trevor Finn said: “The UK motor business has achieved an underlying operating profit of £41.1m (2017: £52.3m) in the period because of adverse trading conditions in the new car market and start up and transformation costs in our Car Store business. In contrast to the new car performance, used cars gross profit has grown, particularly in the second half of 2018. Given the impact of trading and market conditions on future cashflows, there has been a non-cash impairment of goodwill and non-current assets relating to the UK motor business.”
The group claims it is continuing its push into the used car market and launched an online used car sales operation in 2018.
The results continue a downward trend for the group which has seen several profit warnings. Pendragon used its results statement to reiterate its pledge to sell off its US operations and some of its UK premium brand businesses.