19 October 2018

Pendragon has issued a profit warning in which it blames WLTP-related new car supply issues for a poor performance in September and October. In the stock market statement the group says it expects underlying pre-tax profit for 2018 to be £50 million. In 2017, the figure was £65.3m.

The statement marks the second year in a row Pendragon has issued a profit warning at this time of year.

In the statement Pendragon said: “The introduction of WLTP has created disruption in new car sales and uncertainty over new vehicle supply. UK New Car market data for the month of September showed a decline of 20% in new car registrations and a similar trend has continued in October demonstrating the impact of WLTP.

“This has caused significant new vehicle supply disruption which gives us cause for concern over the coming months for new vehicle sales and profitability. This will clearly have an effect on the Group.”

Pendragon was one of the few stock-market listed retailers not to mention WLTP in its previous statements.

The group, which revealed a poor performance in its half year results issued in August also said that it was continuing to experience a costs impact from its used car business development.

“During the year we have continued to invest in our Used Car business in new start up locations and transformation costs. As announced at the half year we commenced the roll out of our ‘used car factories’ for the refurbishment of used inventory. This accelerated investment is being made in spite of the short term dilutive effect and the significant costs incurred, latest data gives us encouragement for the future growth of this part of the business.”

Tags: Pendragon, profit warning