Pendragon presses reset
16 June 2019
Unfortunately, Pendragon is no stranger to a profit warning. This week’s stock market statement makes it three years in a row the retailer has had to downgrade expectations.
It’s clear Pendragon’s rapid growth in the used car market hasn’t gone to plan and shows how risky this sector is if you get things wrong.
Equally, get things right and the rewards can be impressive.
Just look at Motorpoint’s results this week; a 10% hike in profits on a 6.8% growth in revenue.
With new management in place at Pendragon, this week’s statement is no surprise. It presses reset on the business and shows an openness that has been missing from the firm’s statements of late. As a journalist who reports on the stock market announcements from all the listed franchised retail groups, Pendragon’s statements were always the most complex and difficult to understand and always left you wondering if that was a deliberate move.
The contents of this week’s statement may have contained bad news, and resulted in a share price drop of 22% on the day, but in the long run it shows the management team understands the challenge ahead and may just give investors some confidence.
And now that the share price is even lower it may have investors such as Anders Hedin (which increased its share of the firm to more than 11% earlier this year) looking at Pendragon again.
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