Life after Trevor
When I first started writing about the auto retail industry, just over 20 years ago, Pendragon was already established as one of the leading players. Its chief executive, Trevor Finn, was our ‘go-to’ guy for quotes and background on which way the business was heading.
Several years later, I was working as a consultant to Lookers during the bitter takeover battle over Reg Vardy –and subsequent attempt by Pendragon to buy Lookers itself. When we were launching Auto Retail Network in 2004, the first outsider I showed a dummy copy of Auto Retail Bulletin was Trevor Finn. So, one way or another, Finn has been alongside me through some major turning points in my life –though he never has subscribed to Auto Retail Network!
Whatever else you may feel about him, Finn has always been an innovator. Under the guidance of his original chairman and mentor, Nigel Rudd, Pendragon plc was always City-focused. Share price and shareholder value seemed to matter more than operational excellence and, while the share price may have had its ups and downs, major investors have always backed him. Finn believed he could achieve economies of scale and take cost out of running auto retail groups. He believed in centralised services and strict operational control. The downside was that staff at dealership level had little decision making freedom and many of the best people got frustrated and went to work for other groups.
When news of his retirement broke, it was not really a surprise. Rumours that the board were looking for a replacement had been circulating for some time; profit warnings have taken the shine off the share price; and the recent shift in focus towards used cars makes sense operationally but is not necessarily a message that shareholders want to hear.
So, where now for Pendragon? The share price rose briefly on the news but has since dropped back, making the group more vulnerable than ever to takeover. We know people are looking –buying the whole and then breaking it down into its trading divisions to add value would make some sense. The issue is unpicking the complex financial arrangements that the group has in place. Pendragon has dominated the auto retail industry since the demise of Lex but big groups do come and go.
Trevor Finn will have earned his retirement and the board may be looking for a successor. But, without its driving force, I think the writing is on the wall for PDG.
Auto Retail Network