| Pendragon profits are halved |
| Wednesday, 20 February 2008 | |||||||||||||||||||||||||||||||||||||||||
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Pendragon, the UK's largest dealer group, has reported that year-on-year profits have halved. Pre-tax profits for the year ended 31 December 2007 fell to £34.8m down from £69.4m in 2006 as an increasingly competitive UK car market took its toll.  Revenues for the group remained flat at £5.1bn - a figure in line with analysts' expectations. Competitive marketChief executive Trevor Finn said prospects for the market in the year ahead remained uncertain but the company was better placed to face future challenges after closing under performing dealerships.
“As interest rates rose last year the car market became progressively more competitive putting pressure on used car margins,” said Finn.
“We acted early, closing poorly performing sites and, as a result, are better placed to face the challenge in what remains an uncertain market in 2008.”
Despite the downturn in profits, Pendragon said it would maintain its policy of growth through acquisition.
Used carsIt also said it would focus on developing its used car business and had already made changes which involved moving its price banding to include older, lower value cars.
This morning's results were expected by the city.
Three profit warnings in 2007, which saw Pendragon's share price slump 75 per cent, highlighted a toughening of the market place.
The giant dealer group last year also reduced profit expectations for 2008 by £18m.
Pendragon's current share price stands at 33.5p, which values the group at around £220m.
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Comments (13)
fingers
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and now they are shu... and now they are shutting the Sunderland bodyshop that has been the 2nd most profit making bodyshop in the company after Leeds and moving it to Gateshead that has never made a profit |
ledzepper
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Whats the point in b... Whats the point in buying more buisnesses? Lets face it they bought Vardy group and naffed that up. I aggree with PDG=34M Staff retention is the key forward but when do you ever hear Trevor Finn have big plans for that? I AM NOT A NUMBER I AM A FREE MAN! Peter Vardy used to say "with every pair of hands comes a free brain" Trevor Finn seems to think with every pair of hands comes a cost, lets cut it! Your buisness is only as good as the staff you employ! if you employ monkeys youll have a zoo |
Mike McGee
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From my understandin... From my understanding Trevor decided to sell the sites that were either loosing money or not supported by the manufacturer (Like VW who wont deal with Pendragon at all) in 2007/8 and has made a 67 site reduction in the portfolio and made substantial sum's from the sales of these sites. Once we can get to see the accounts for the whole year, I would expect the whole group to have lost money overall if it had not of been for the large amount of funds generated from disposals...... There are lots of professional outfits dedicated to the market that make far more money with less sites. Arnold Clarks as an example in 2006/7 made 64 million whilst Pendragon made 67 million in that same year Arnold Clark's bought 7 million worth of a*set's from the Dragon making Arnold Clarke's the most profitable group in the UK 2006/7...... Arnold, Scott and Brian (and the rest) will be more than happy to keep some inspiration in a very difficult market in 2008, I do know that out of these two companies there will be only one winner.Watch out also for Mr Forester, Peter Vardy Junior and the rest as well as they will not allow failure either... I personally cannot believe that the investors allow/ed all this to take place as there are very few people that make substantial sums from the Dragon look at the shares and decide for yourself.. |
Richard Stroker
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Oh come off it Wayne... Oh come off it Wayne, your'e pulling it way out of proportion.You really ought to get out more.Pendragon ain't so bad; your just sore!Now come on! |
rodeo
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6 Years ago we were ... 6 Years ago we were a dealer at the top of the tree makeing over a million pound profit. Since Pendragon took over we make less than half that profit abd have slipped way down in BMW ranking. Pendragon do not give any resposability at dealership level. Pendragon do not divulge any decisions until it is to late to find alternative employment. When you have worked in the same dealership for a long time it is heartbreaking for staff and there loyal customer base. |
PDG=34M
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Initially the rsult ... Initially the rsult looks good but when you consider what they have achieved with the takeovers of RV and the profits they produced with a lot less dealers, it must be a major concern, they need to address the fundamental problem of staff retention. |
Local dealer
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Only 7 used cars on ... Only 7 used cars on their Boston site, cannot see that increasing sales. |
Wayne Kerr
said:
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Growth is not what P... Growth is not what Pendragon is currently doing. Recent closures include Evans Halshaw Ford at Queensferry, Stratstone Volvo in Plymouth and the Mercedes Benz bodyshop in Bolton. By their own account Pendragon have now gone from over 400 dealerships to 343 in the UK. They have sold the dealerships they had in Germany, while other groups are expanding into Europe and beyond. To top it all, many functions at Houghton House are to be made redundant ahead of relocating to smaller offices. They are completely removing the Driveaway finance teams, as well as the stock purchasing team there and at Hetton and Darlington. They are cutting back on marketing hoping to rely on the internet to provide new sales leads. |
grumpymike
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Interesting that the... Interesting that their compet*tors have not experienced problems to this extent. I see that Trevor Finn has now announced that to fix the profit shortfall the group is moving into the 'banger' market. Apparently they can't make any money out of premium cars . Customers in this sector obviously aren't influenced by their cost cutting ma*s-market approach to everything. Their latest series of payment lead advertising that is virtually identical for all of their premium brands being indicative of this approach. Still they won't have to come up with any more original ideas, as this advertising style will surely appeal to 'banger-man'. |
Paul Anderson
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"Maintain growth thr... "Maintain growth through aquisition" For a company as a whole that is now worth less than half what it paid for Vardy seems a little bold to say the least! |
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