Auto Retail Agenda: 13 March 2023
11 March 2023
- PENDRAGON ACTIVIST INVESTOR DEMANDS SHAKE-UP
- CAZOO SELLING DELIVERY VANS TO BIG MOTORING WORLD
- TESLA PLANS NEW CAMBRIDGE STORE
- ANOTHER MARSHALL DIRECTOR DEPARTS
- DICK LOVETT NEW DELIVERY TRUCKS FOR ASTON, FERRARI
- JLR EU RETAILERS THREATEN LEGAL ACTION
- MERCEDES STONEWALLS AUSTRALIA DEALER COUNCIL
- STOCKWATCH
- COMING UP: Budget
- UK NO LONGER AT RISK OF RECESSION
- UK TO BECOME ‘SIGNIFICANTLY WORSE PLACE TO DO BUSINESS’
Pendragon activist investor demands shake-up
Pendragon activist investor Palliser is demanding a boardroom shake-up in the wake of a failed £400m takeover bid. Palliser, which owns around 4% of Pendragon, is calling for three of its directors to be inserted on the Evans Halshaw and Stratstone retailer’s board.
In a letter submitted last week, Palliser claimed the board had become distracted by the failed Hedin takeover. It wants chairman Ian Filby and chief executive Bill Berman to refocus on profitability by expanding its aftersales operation.
Palliser was formed in 2021 by James Smith, formerly of Wall St activist Elliott Management. Its campaign against Pendragon comes weeks after masterminding a boardroom clear-out of FTSE 250 oil firm Capricorn Energy.
Pendragon shares fell 0.5% to 18.1p last week. Hedin struck a 29p-a-share take-private deal with the board in November 2022, valuing Pendragon at £400m. The deal collapsed weeks later after Hedin was unable to secure financing.
Cazoo selling delivery vans to Big Motoring World
Cazoo is selling off its trademark delivery vans. The Sunday Times understands Big Motoring World has bought around 70 of them.
It comes as Cazoo seeks to conserve cash. It ended 2022 with £250m in the bank. Founder Alex Chesterman insisted a scaled-back business plan means it won’t have to raise more money over the next 18-24 months.
In contrast. Constellation boss Avril Palmer-Baunack said demand at Cinch had surprised her. “We’re having a very strong quarter.” It is on track to sell more than 70k cars this financial year, and more in 2023-24. Cazoo expects to sell 40-50k cars.
Cazoo achieved an $8bn valuation after floating in New York via a Spac. Shares have now plunged 99%, valuing it at $75m.
Last week, shares in Cazoo investor Molten Ventures plunged by almost a fifth following panic over the US Silicon Valley Bank. FTSE 350 firm Molten has a £150m debt facility with SVP.
As well as investing £9.9m in Cazoo, it has also invested in banking app Revolut, Trustpilot and Crowdcube.
Tesla plans new Cambridge store
Tesla has submitted plans to build a new store north of Cambridge. The new site would include 99 parking spaces, 12 Supercharger spaces – and 60 cycle spaces. “The proposal presents a unique opportunity for Tesla to better serve the Cambridge market given the current lack of available sites within the Cambridge automotive market and the high demand in the area,” said the proposal, which was submitted last week.
Another Marshall director departs
Marshall group counsel and company secretary Stephen Jones has left the business. He is the third senior executive to leave the retailer in the past nine months. CEO Daksh Gupta stepped down with immediate effect in May 2022. CFO Richard Blumberger left in December 2022.
Dick Lovett new delivery trucks for Aston, Ferrari
Dick Lovett Aston Martin and Ferrari have taken delivery of two Volvo FL 16-tonne trucks for collecting customer vehicles for repair and servicing, and helping deliver new vehicles. The trucks have bespoke paintwork to match Aston Martin and Ferrari official colourschemes, and have all-round air suspension to tailor the load angle and help make transporting supercars “far less stressful”.
They are supplied on five-year Volvo Gold contracts which include real-time vehicle monitoring.
WORLD NEWS
JLR EU retailers threaten legal action
JLR retailers in Europe are threatening legal action over new contracts that they say significantly reduce margins, after they invested millions in showrooms at the request of JLR. The new terms come after JLR terminated existing contracts; it wants to introduce them as soon as 1 April.
As well as a halving of margins to a maximum of 9%, a 20% sales plunge in Europe is adding to the pressure on retailers. JLR is reportedly also seeking to curtail the influence of JLR’s European dealer association.
Here in the UK, JLR has responded to reports the Jaguar network could be cut to just 20 retailers, from today’s 80 sites, by stating: “It is too early to disclose any further details as we have only begun discussing the matter with our retail partners.”
Auto Retail Agenda also understands UK sales director Patrick McGillycuddy has replaced Rawdon Glover as JLR UK MD.
Mercedes stonewalls Australia dealer council
Mercedes-Benz Australia has refused to engage with the national dealer and agency councils over unresolved agency transition issues. Mercedes-Benz APAC CEO Florian Seidler said in a letter the firm would engage with retailers on a one-to-one basis, not through councils.
“Our experience is that neither forum adequately represents the diverse interests of all agents and we have had sufficient feedback from agents who have stated that they prefer to deal directly with us,” he said.
Last year, 38 Australian Mercedes-Benz retailers launched legal action in the Federal Court, seeking $650m AUD in compensation. “It’s a large claim, but it’s more than fair,” said AADA chief executive James Voortman. A decision from judge Jonathan Beach is expected in Q1 2023.
STOCKWATCH
Closing prices on 10 March 2023 and weekly change
Auto Trader Group 575.6p (-13.2p / -2.2%)
Caffyns 500.0p (n/c)
Halfords 190.4p (-12.2p / -6.2%)
Inchcape 886.5p (-24.5p / -2.7%)
Lookers 86.5p (-4.3p / -4.8%)
Motorpoint 138.0p (-2.0p / -1.4%)
Pendragon 18.3p (-0.1p / -0.5%)
Vertu 62.0p (+0.4p / +0.6%)
COMING UP
Tuesday, unemployment figures
Wednesday, Budget
MONEY MATTERS
UK no longer at risk of recession
City analysts have revised gloomy predictions and now expect the UK to avoid a recession in 2023. January ONS data showed the UK economy returned to growth with 0.3% expansion, after shrinking by 0.5% in December. Goldman Sachs no longer forecasts a recession, Deutsche Bank has removed its recession forecast and City says the UK is on course to expand rather than shrink.
UK to become ‘significantly worse place to do business’
Corporation tax rises and the expiry the super-deduction tax break mean Britain is set to become a “significantly worse place to do business,” centre-right think-tank the Centre for Policy Studies has warned. The UK will fall from 10th to 33rd out of 38 leading economies in terms of the competitiveness of its business tax regime.
From 1 April, the main rate of corporation tax is due to rise from 19% to 25%, the first such increase since 1974.
Tags:
AADA, agency, Big Motoring World, Budget, Cazoo, Cinch, Constellation, corporation tax, Dick Lovett, JLR, Marshall, Mercedes Benz, Palliser, Pendragon, recession, Tesla 
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