Pendragon revenues decline 7.2% in Q3 amid WLTP market disruption
Pendragon has projected full year financial results delivering a further 17.2% decline in underlying profit before tax in an interim management statement revealing declines in turnover and profit during Q3.
It was stated today that group revenues had declined by 7.2% in the 3 month period to September 30th as underlying profit before tax of £1.1m represented an increase on Q3 2017’s £3m. The group insisted that it was “encouraged” by its Q3 performance.
It was said: “Given the introduction of the WLTP legislation in the new car business and our continued investment in our used car business in new start up locations and ‘used car factories’, this has had a short term dilutive effect on profitability. We anticipate that our full year underlying profit before tax will be approximately £50m. We are encouraged by the improving used performance across the group in quarter three of this year and this will be a key growth area for the business in 2019.”
Pendragon’s used vehicle revenue declined by 6.3% as gross profit rose by 13.7%. The group described this as a strong recovery during the period, from 5.7% to 6.9%.
New vehicle sales declined by 9.1% as gross profit remained flat despite an increase in margin from 6.5% to 7.1%.
Aftersales revenue have declined by 2.9% as gross profit declined by 2.4%.
Leasing revenue declined 6.6% as gross profit rose by 17.9%.
Trevor Finn, Pendragon chief executive, focussed the group’s efforts on achieving growth in used cars and its Pinewood Technology software division, which specialises in DMS systems.
Q3 did succeed in delivering growth for the group’s software business. Revenues rose by 5.1%, with gross profit up by 2.9%.
Pendragon said that it had maintained a robust balance sheet with net debt against underlying EBITDA remaining below its target range of 1.0 to 1.5.