Car dealership giant warns Ukrainian conflict could further dent new motor supply

Pendragon, the group behind the Evans Halshaw and Stratstone car dealerships, has warned that the Ukrainian conflict may further dent new motor supply this year as it revealed a return to annual profit.

The firm said the shortage of new cars is expected to continue throughout 2022, with the potential for the current crisis to compound supply woes and send costs rising even higher.

Its warning came as the group posted pre-tax profits of £73.3 million for 2021 against losses of £29.6m in 2020 after it benefited from the lifting of Covid restrictions and as car shortages sent used vehicle prices surging.

Underlying pre-tax profits hit a record £83m, up from £8.2m in 2020.

Pendragon's Stratstone business includes franchises for the likes of Aston Martin, Ferrari and Porsche.

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But the group, whose Stratstone business includes franchises for the likes of Aston Martin, Ferrari and Porsche, said it will face higher costs in 2022 amid pressure to increase staff wages, soaring energy bills and the impact of business rates reverting to full levels.

Chief executive Bill Berman told investors: “We expect existing supply chain constraints to continue in the current year, and we are mindful of the potential for further disruption to new vehicle supply chains as a result of the conflict in Ukraine.”

The firm said trading in the first two months of 2022 has been good, with underlying profit in January and February ahead of 2021 as higher prices have supported margins.

But it added: “Both new and used margins are expected to reduce during the course of 2022 from extraordinary levels achieved in 2021.”

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