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Pendragon returns to profit after loss during Covid-19

13:31, 15 September 2021

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Line up of used cars
Pendragon posts first half profit - Photo: Shutterstock

Pendragon is reporting higher sales and profits for the half year as the industry recovers from Covid-19 lockdowns.

The car dealer recorded profit of £35.1m ($48.5m) for the six months ended 30 June, compared to a loss of £31m last year.

The Nottingham-based company also credited “significant improvements” in its digital capability, enabling it to largely mitigate the impact of the third national lockdown.

The upbeat statement went down well with investors. Shares gained 1.5% to 18.79p by early afternoon on the London markets.

Financial performance

Group revenue was up 49% to £1.8bn in the period – compared to £1.2bn in the corresponding period last year.

Pendragon also outperformed the new car market, as measured by the Society of Motor Manufacturers and Traders (SMMT) with a 42.7% like-for-like increase in new cars sold.

This compares to total market growth of 39.2% and a market increase of 35.7% in Pendragon represented franchises

Exceeded expectations

CEO Bill Berman said the first half of the year marked “another strong period of progress and growth”, despite the nationwide lockdown in the first quarter.

“We exceeded our initial expectations for the half and delivered an underlying profit before tax of £35.1m,” he added.

Berman is also hopeful for the coming months. “We remain confident that underlying profit before tax for the full year will be £55m to £60m, ensuring we stay on track to deliver our target of £85m to £90m by full-year 2025,” he said.

Digital improvements

While acknowledging the positive market tailwinds, Berman insisted progress was underpinned by cost savings and the improvements made to its digital capabilities.

“The work undertaken to advance our online channels last year meant more than 40,000 vehicles were delivered to customers during the lock-down period alone,” he said.

However, he also echoed concerns. “In line with the wider market, we are anticipating continued shortages in both new and used vehicle supply for the remainder of the year,” he added.

Although customer demand and the order book remains strong, Pendragon expects shortfalls in supply and delivery dates for the remainder of the current financial year.

Read more: Car dealer Pendragon ups profit forecast as demand improves

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