7th Aug 2018 10:30
LONDON (Alliance News) - Automotive retailer Pendragon PLC on Tuesday reported a steep decline in profit for its first half, with revenue broadly flat, following an expected weak performance in its core UK Motor arm.
For the six months to June, Pendragon's pretax profit slipped to GBP27.3 million, a decline of 42%.
Underlying pretax profit was down 41% to GBP28.4 million, while like-for-like pretax profit fell 35% to GBP31.5 million.
Revenue rose 0.2% year-on-year to GBP2.48 billion, but fell 0.9% on a like-for-like basis to GBP2.41 billion.
The company has increased its interim dividend to 0.80 pence per share from the 0.75p a year prior.
Pendragon's UK Motor business posted a 1.5% decline in underlying revenue to GBP2.20 billion, 1.6% lower like-for-like, while gross profit fell 9.6% to GBP237.4 million and 8.9% like-for-like.
Within UK Motor, used car underlying revenue rose 0.9% but fell 0.5% like-for-like, while new car sales declined 3.9% and 2.5% like-for-like.
Pendragon is investing to try to building a market-leading used vehicle and aftersales business, and the plan is to double user car revenue by 2021. It has hired a used car director to oversee this, and recently has opened new used-car stores in Norwich, Shrewsbury, and Ipswich.
US Motor, which Pendragon has put up for sale, brought in GBP232.0 million of underlying revenue, 13% higher and 0.7% like-for-like, while its gross profit increased 12% year-on-year and 0.4% like-for-like.
Looking forward, Pendragon will keep investing to grow used-car sales, and expects to receive GBP100 million or more from its US Motor sale as well as GBP74 million more due to disposals and investment not deployed in the UK.
Pendragon expects its overall performance for 2018 to meet expectations, with an improved performance in the second half of the year.
Shares were 0.2% lower on Tuesday morning, trading at 24.00p apiece.
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