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Pendragon shares crash as car dealer slumps to surprise first-quarter loss

Bosses had expected a profit in excess of £6mln for the quarter, but Pendragon actually delivered a loss of £2.8mln

ferrari stratstone
Uncertain consumers aren’t splashing out on new (or used) cars

Pendragon PLC (LON:PDG) crashed on Wednesday morning after the new and used car dealer fell to a surprise loss in the first quarter.

The Stratstone and Evans Halshaw owner, along with most of its peers, has endured a tough year or so.

Car sales have been steadily falling as nervous consumers hold off on big-ticket purchases, while new emissions regulations have also dented demand.

READ: Pendragon blames Brexit for sharp drop-off in new car sales

As a result, dealers have had to cut prices of new and used vehicles in a bid to clear their showrooms, which has protected the top line but hammered margins.

Pendragon reported 9.1% fall in profits from new car sales in the three months to the end of March, while profits from used cars fell 1.6%. Aftersales profits also tumbled by 9.0%.

At the same time as having to slash prices, Pendragon saw operating costs rise 3.3% which put even more pressure on margins.

Those issues meant Pendragon slumped to a £2.8mln loss in the first quarter. Bosses had been hopeful of a profit of £6mln, possibly more.

New chief executive Mark Herbert and his righthand man, finance boss Mark Willis, are undertaking a review of the business, the results of which will be published over summer.

Shares fell 5.1% to 23.9p on Wednesday morning.

Quick facts: Pendragon Group

Price: 11.02 GBX

LSE:PDG
Market: LSE
Market Cap: £153.94 m
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