Pendragon has estimated that the slowdown in trading, caused by the effects of Covid-19, impacted the group underlying profit before tax by £10m in the quarter.
On 23 March Pendragon temporarily closed all of its retail locations in line with government requirements. The company has since reopened, with new safety procedures, around 20 service centres during April (out of a total of 145), to either service or repair vehicles for key workers or for customers who depend upon having access to a vehicle.
As demand has started to return, the Group has reopened more of its service centres, with a total of 125 open as of today, operating at a reduced capacity with around 20% of total technicians currently now returned to work. Weekly labour sales, whilst building momentum, currently remain significantly down on the same time last year, with last week representing c.17% of the level achieved in the same week in 2019. As customer demand builds, Pendragon said that further technicians will be brought back to work to increase capacity and meet this higher demand.
It is currently expected that dealerships will be able to open, with compliant social distancing measures, from 1 June, and the Group will work with trade bodies and OEM partners as the situation develops to enable this to happen safely and effectively.
Bill Berman, chief executive of Pendragon, said: “I would like to take this opportunity to recognise the way in which our associates have responded to the challenges posed by the COVID-19 pandemic and to thank them for working to keep key workers on the move over the past two months.
“The actions we took during the second half of 2019 to focus on costs and to reduce used stock levels started to show results both during that period and on into the first quarter of 2020, resulting in increased profitability in Q1, despite the impact of the pandemic. The commercial consequences of a full lockdown have obviously affected the business, but we moved quickly to implement a broad range of actions to mitigate the enforced closure, and I am confident that we will emerge in a strong position as the current restrictions ease.
“We are now preparing to reopen from 1 June and will therefore have the capabilities in place to meet the full needs of our customers across new, used and aftersales, as well as driving our “We come to you” online offer.”