2nd Sep 2020 09:45
(Alliance News) - Pendragon PLC on Wednesday said it has finished its strategic review and is now targeting underlying pretax profit between GBP85 million and GBP90 million
The motor retailer - which operates Evans Halshaw, Stratstone, and the Quickco and Car Store used car supermarkets - said it has assessed consumer habits, and has positioned the company to handle the recovery in post-lockdown UK.
The three areas of focus for Pendragon will be to "unlock value" in its UK franchised motor unit; "grow and diversify" its Pinewood softwarre business; and "disrupt" standalone used car sales.
"We have created a roadmap to deliver our target underlying profit before tax of about GBP85 million to GBP90 million by 2025 and a target underlying profit before tax margin of about 2%. We believe this an ambitious plan, but is achievable through the delivery of the initiatives we have set out," Pendragon said.
In 2019, Pendragon recorded an underlying pretax loss of GBP16.4 million.
Chief Executive Bill Berman added: "We firmly believe the three strategic priorities set out today will provide a platform to transform the group's performance, leading to sustainable profit growth and delivering attractive returns for our shareholders. Critically, our strategy is designed to equip the business to react to changing consumer patterns in the years ahead and ensuring, in particular, that we are well positioned to take advantage of digital innovation."
As Pendragon began to reopen, it sought to make permanent "efficiency gains". This included losing-down stores - that it felt had no pathway to sustainable profitability - and reducing the size of its overall workforce.
As a result, Pendrago said it has made annual savings of GBP37 million.
Berman added: "I am confident we can unlock the full potential of Pendragon by delivering targeted improvements to our people, our systems and our operations. We look forward to executing this strategy and embarking on an exciting new chapter for Pendragon."
Shares in Pendragon were up 1.7% in London on Wednesday morning at 8.14 pence each.
By Paul McGowan; [email protected]
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