Pendragon has completed the closure of 22 Car Store locations following the company’s decision to downsize in the face of challenging economic and market conditions.
The company published an interim management statement for the period from 1 July 2019 to 30 September 2019, revealing an underlying profit before tax of £3m – a 57.9% increase against the same period last year.
Like-for-like group revenues are down 3.6%, driven by a decline of 16.7% in used revenue (UK motor division down 12% and Car Store down 39%). Overall sales were down, with Pendragon outlining a renewed focus on rebuilding the quantity and quality of the age-profile of stock during the period.
Gross profit was down 17.3% on a like-for-like basis (UK motor division down 11% and Car Store down 49% on a like-for-like basis) principally driven by the lower levels of sales.
The statement read: “Whilst the improved performance during the period is encouraging, we continue to expect economic and market conditions to be challenging, with the ongoing uncertainty around Brexit impacting consumer confidence. The full-year underlying loss before tax remains in line with the board’s expectations.”
In September, the company announced it would be cutting 300 staff after posting a pre-tax loss of £32.2m – down 188% year-on-year. The company said the faltering performance was due to a combination of issues, principally the level of unsold used car stock. Pendragon addressed this issue by releasing stock through a combination of lower retail pricing and clearance through trade auction channels.
At the time, Chris Chambers, non-executive chairman of Pendragon, said: “There has been a material decline in the Group’s profitability principally as a result of the actions taken to address excess used car stock. We made significant progress reducing this exposure in the latter period of the first-half and we remain committed to the strategy of growth in the Group’s used car proposition.”