Auto Retail Agenda: 2 October 2023
01 October 2023
- LITHIA ‘CONFIDENT’ ON PENDRAGON DEAL
- £6m LOOKERS CAR HUB PLANS GET GREEN LIGHT
- JCB MEDWAY TURNOVER UP, PROFIT STABLE
- PERRYS CHAIR RICHARD INGRAM STEPS DOWN
- TV SHOW FORCES USED CAR DEALER TO CLOSE
- CARMAX SHARES SLIDE ON PROFIT MISS
- RETAILERS TO FEEL IMPACT OF US STRIKES
- STOCKWATCH
- COMING UP: Pendragon meeting to decide Lithia proposal
- UK GROWTH BIGGER THAN FORECAST
- UK STOCK MARKET TO BECOME EU’S BIGGEST AGAIN
- ENERGY BILLS FORECAST TO RISE IN 2024
Lithia ‘confident’ on Pendragon deal
Lithia Motors CEO Bryan DeBoer indicated last week he believes his company will win the bidding war for Pendragon.
He said to BofA Securities analyst John Murphey he was confident Lithia “would be able to close the deal despite two competing bids, but also emphasised the importance of discipline”.
Last week, AutoNation submitted an offer, following two joint bids (one rejected, one still under consideration) from Penske and Hedin. AutoNation’s 32p a share bid matched Penske and Hedin’s.
“At this time, the only legally-binding offer Pendragon has received is from Lithia Motors,” said a Lithia spokesperson.
Pendragon will hold a meeting this Friday to accept or reject the Lithia bid. It requires a 51% vote or greater.
ICDP’s Steve Young said higher offers could come this week from Penske-Hedin or AutoNation, ahead of the shareholder vote. Lithia could also raise its bid.
Young also speculated whether Group 1 Automotive will put in a bid. Group 1 did not respond to a request for comment.
£6m Lookers Car Hub plans get green light
Lookers’ £6m Teesside Car Hub used car retailer has been given the green light from Middlesborough Council. It is set to open later in 2023 and will create additional jobs, taking its staff numbers in the area to around 200.
The 25,000 sq/m site, located alongside its new BYD franchise, will also accommodate a standalone Ford retailer and an EV experience centre. The site will boast six 150kW EV rapid chargers.
In other EV retail news, the NFDA has announced a snap survey into whether the revised 2035 EV ban has led to any immediate changes in demand for electric vehicles.
JCB Medway turnover up, profit stable
Kent retailer JCB Medway has described its 2022 results as “excellent given the macro-economic uncertainty”. Turnover for the retailer, which has 22 franchise points, grew from £192m to £228m, and profit before tax rose slightly from £4.3m to £4.4m. Margin fell from 2.28% to 1.95%.
Perrys chair Richard Ingram steps down
Longstanding Perrys chairman Richard Ingram stepped down last Friday (29 September). The 66-year-old had been a non-executive director of Perrys Motor Group since 2002 and became chairman in 2018.
TV show forces used car dealer to close
A landlord has evited a used car dealer in Telford to make way for a rival who is competing on Channel 4’s Double The Money TV show. The displaced dealer has accused the owner of a ‘stich-up’.
WORLD NEWS
CarMax shares slide on profit miss
US used car retailer CarMax shares slid more than 13% last week as it missed profit expectations and flagged consumer affordability headwinds. Inflationary pressures, higher interest rates, tighter lending standards and low consumer confidence are all impacting unit sales, it said. Rivals AutoNation, Sonic, Penske, Group 1 Automotive and Carvana also all fell.
Retailers to feel impact of US strikes
Inventories of popular US models such as the Ford Bronco are forecast to run low in the next four to six weeks if the UAW strike continues. Retailers say there is now a risk customers could turn to marques not made by the ‘big three’ of Ford, GM or Stellantis, such as Japanese or South Korean brands – or non-unionised, direct-sales Tesla.
STOCKWATCH
Closing prices on 29 September 2023 and weekly change
Auto Trader Group 617.6p (-7.4p / -1.1%)
Caffyns 550.0p (n/c)
Halfords 198.3p (-4.9p / -2.4%)
Inchcape 758.5p (-7.5p / -0.9%)
Lookers 129.6p (+0.2 / +0.1%)
Motorpoint 88.0p (n/c)
Pendragon 33.3p (+3.2p / +10.0%)
Vertu 74.7p (+0.5p / +0.6%)
COMING UP
Tuesday, BRC shop price index
Friday, Pendragon meeting to accept or reject Lithia proposal
Friday, Halifax house price index
6 December: NFDA Driving Digital: Special Edition. Sign up here: https://tinyurl.com/mt2y378d
MONEY MATTERS
UK growth bigger than forecast
Revised ONS figures show the UK economy grew more than previously thought in the first three months of 2023. It means the UK economy has surpassed than France and Germany in terms of GDP growth since the pre-pandemic year of 2019.
The ONS earlier in September announced the pre-pandemic contraction was less severe than thought and growth in 2021 was considerably better than before.
UK stock market to become EU’s biggest again
London is set to recapture its crown as Europe’s biggest equity market, less than a year after losing the crown to Paris. The market capitalisation of British listings now stands at $2.9trn, compared to France’s $2.93trn. France has slid from last year’s $3.5trn valuation as luxury goods come under pressure, while Britain has been boosted by growth in energy stocks.
Energy bills forecast to rise in 2024
Energy bills are forecast to rise in 2024. Ofgem is likely to increase the price cap to £1,898, up £64, says Cornwall Insight. However, from yesterday (Sunday 1 October), they have fallen roughly £200 from three months earlier, and the price cap is forecast to fall again from April 2024.
Tags:
AutoNation, Bryan DeBoer, CarMax, energy bills, FTSE, GDP, Group 1, Hedin, JCB Medway, Lithia, Lookers, NFDA, Pendragon, Penske, Perrys 
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