Pendragon warns over annual loss in tough car market

Pendragon, the car dealership giant behind the Evans Halshaw and Stratstone chains, has warned that it expects to slide to a small annual loss amid a tough market and "internal operational challenges".

Pendragon pointed to a challenging car market, Picture: Lisa Ferguson

The group said it is set to be "significantly" loss-making in its first half, before returning to profit in the final six months.

It had previously guided for 2019 results to be broadly in line with the previous year, when it reported an underlying pre-tax profit of £47.8 million.

The company blamed a challenging car market, but also revealed widening losses in its Car Store vehicle supermarket arm, high levels of used car stocks left to shift, one-off costs to its bottom line, and the impact of price cuts to boost new motor sales.

It is now launching a turnaround plan, which will be outlined in detail alongside interim results in late September.

It said this will focus on improving profitability of its core UK motor and leasing businesses, launch growth plans for its dealer management system and software business Pinewood and overhaul Car Store.

Pendragon chief executive Mark Herbert said: "Notwithstanding the challenging market and uncertain macro outlook, the expected loss for the year is still disappointing. That said, we see significant addressable opportunities to improve the business and return to profitable growth."