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Pendragon to sell its US motor business

Pendragon pledged continued investment to complete its national network as a means of achieving its objective to double used car revenue by 2021

Used car
The used car business will remain the group's focus for growth

Car dealer Pendragon PLC (LON:PDG) is to sell its US motor business and cut back on the number of its UK premium brand franchise locations.

The company has completed its strategic review and decided to cut back in some areas to release capital to invest in its national network.

READ: Car dealer Pendragon slumps as it forecasts £15mln tumble in full-year profits

The company announced that the reduction of the premium brand franchise locations over a three-year period would release £100mln of capital through a mixture of disposal proceeds and a reduction in operating expenditure.

Coincidentally, the company also expects to release £100mln or more from the sale of the US car business.

Share repurchase programme

In expectation of the cash inflow, Pendragon intends to resume its share repurchase programme.

"Following our strategic review, we have focused on reshaping the business to accelerate transformation and ensure capital allocation is optimised across the group,” said Trevor Finn, chief executive of Pendragon.

“The actions I am announcing today are a further step towards achieving our strategic objectives. I believe this strategy will provide more reliable and sustainable returns," he added.

Shares in Pendragon were up 3% at 26p in early deals.

Quick facts: Pendragon Group

Price: 13 GBX

LSE:PDG
Market: LSE
Market Cap: £181.6 m
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