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Pendragon PLC swings to profit in 2020 thanks to second-half recovery, but remains cautious

“At this point, we remain cautious about the shorter-term economic outlook as government support is gradually withdrawn, and the board notes the potential for short-term constraints in new vehicle supply,” said chief executive Bill Berman

Pendragon PLC () swung into an underlying profit in 2020 as the car retailer’s second half performance more than made up for the disruption caused by Coronavirus (COVID-19) in the first six months, but said it remains cautious.

The group posted an underlying pretax profit of £8.2mln, versus a loss of £16.4mln in 2019, with underlying pretax profit of £39.2mln in the second half of 2020 outweighing a £31.0mln loss in the first six months. It estimated the impact of COVID-19 to be about £44mln in the first half. 

However, group revenue dropped 35% to £2.9bn in 2020 as sales of both new and used cars declined.

During the year, Pendragon introduced both click and collect and home delivery options for its customers and made changes to its vehicle acquisition processes as part of a new strategy. It completed a structural review capable of delivering an additional £35mln annually.

“Whilst performance has undoubtedly been impacted by the ongoing third national lock-down, the improvements made to the group’s digital proposition have enabled it to trade with a high level of resilience, with over 20,000 vehicles delivered to customers in the first two months of the year,” the company said about trading this year. 

Group like-for-like new car volumes are 24.3% lower year on year to the end of February 2021 and used car volumes are down 32.8%. 

“At this point, we remain cautious about the shorter-term economic outlook as government support is gradually withdrawn, and the board notes the potential for short-term constraints in new vehicle supply, but I am confident our business model has adapted to be resilient in the current conditions, and that we are well positioned to capitalise on the potential for any pent-up demand that may exist as our stores fully reopen in April,” said chief executive Bill Berman.

Read More: Pendragon PLC swings to profit in 2020 thanks to second-half recovery, but remains cautious

2021-03-24 04:32:00

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