Auto Retail Agenda: 15 August 2022
13 August 2022
- LITHIA BEHIND PENDRAGON TAKEOVER BID
- CAZOO, CARGIANT ‘PUTTING WRECKS BACK ON THE ROAD’
- GREENHOUS IN £4.8m PROFIT
- NFDA’S FUTURE OF AUTO RETAIL AT BRITISH MOTOR SHOW
- EMIL FREY TO DISTRIBUTE CHINESE BRANDS IN EUROPE
- LMP TO LIQUIDATE
- STOCKWATCH
- COMING UP: British Motor Show, CPI
- FASTEST PRICE RISES ON RECORD FORECAST
- JOB ADS HIGH
- TRADE DEFICIT HIGHEST ON RECORD
Lithia behind Pendragon takeover bid
US retail giant Lithia Motors was behind last month’s rejected offer for Pendragon. The $7bn retailer tabled a 29p per share bid, valuing Pendragon at £460m. Goldman Sachs advised Lithia.
The large shareholder who blocked the bid was Hedin Group, say insiders: Hedin’s own 28p a share offer was rejected earlier this year.
Sky News reports leading shareholders said they “were unlikely” to accept any bid unless it was worth more than 30p a share. However, four of the top five shareholders had agreed to back the 29p offer.
Pendragon’s shares have risen by around a third over the past year. Last Friday, they were trading at 24.2p, “a meaningful discount to the Lithia bid”.
Lithia is the third largest auto retailer in the US, but has no operations outside North America. Its new car sales are thriving in 2022 and it could overtake AutoNation become the number one new car retailer in the US. Pendragon’s American CEO Bill Berman was formerly COO at AutoNation.
Auto Retail Agenda approached several Lithia executives for comment but received no response.
Cazoo, Cargiant ‘putting wrecks back on the road’
An undercover investigation by Channel 4’s Dispatches has found that used car dealers including Cazoo and Cargiant have been selling cars written off by insurers.
A Cat S Skoda Karoq was on sale at Cargiant, with no mention of accident damage in the advert. An advert for BMW 1 Series on sale at Cazoo did not mention accident damage, but a salvage report said airbags had been deployed in an accident. One industry expert estimates around 40k undeclared write-offs are sold each year.
The programme, ‘Dispatches: Why Is My Car So Expensive?’, airs tonight (Monday 15 August) at 8pm.
Greenhous in £4.8m profit
Telford’s Greenhous group saw pre-tax profit rise from £1.3m to £4.8m in the year ended December 2021. Turnover rose from £299m to £449m with car and van sales rising 10% and margins improving. The company’s gearing reduced from 602% to 70%.
NFDA’s future of auto retail at British Motor Show
The NFDA and guest speakers will discuss the future of automotive retailing during the opening day of the 2022 British Motor show. Auto Trader’s Nick King, ICDP’s Steve Young and MHA’s Alastair Cassels will join the NFDA’s Sue Robinson from 10.30am on Thursday 18 August.
Pre-register here: https://bit.ly/3dreXdS
WORLD NEWS
Emil Frey to distribute Chinese brands in Europe
Emil Frey, Europe’s largest auto retail group, is to distribute Chinese Great Wall brands Ora and Wey. Sales of the Ora Funky Cat EV start in Germany in Q4, with the Wey Coffee 01 plug-in hybrid SUV following soon after. Discussions are underway for other key markets in Europe.
IM Group is distributing the Ora brand in the UK.
LMP to liquidate
The board of ambitious public US auto retailer LMP Automotive Holdings Inc has recommended a liquidation plan to dissolve the company. Most of its franchised retailers are to be sold. In early 2021, LMP said it hoped to acquire 80 to 100 retailers by the end of 2022. “It didn’t work out,” said one adviser. “They didn’t have the capital to get through it all.”
STOCKWATCH
Closing prices on 12 August 2022 and weekly change
Auto Trader Group 658.8p (+5.4p / +0.8%)
Caffyns 550.0p (n/c)
Halfords 166.9p (-6.7p / -3.9%)
Inchcape 829.0p (-8.5p / -1.0%)
Lookers 78.9p (-5.1p / -6.2%)
Marshall Motor Holdings 397.0p (n/c)
Motorpoint 197.0p (+3.5p / +1.7%)
Pendragon 24.2p (+0.9p / +3.7%)
Vertu 55.1p (-1.8p / -3.2%)
COMING UP
Monday: RICS housing market survey
Tuesday: unemployment rate
Wednesday: CPI
Thursday-Sunday: British Motor Show
Friday: GFK consumer confidence
MONEY MATTERS
Fastest price rises on record forecast
Inflation is rising at the fastest pace on record and is expected to hit 10% for older people, who spend a greater proportion of their income on food and energy. For younger people aged under 30, who spend more on goods and services, it is 8%.
The latest CPI inflation rate is published on Wednesday; in June, it was 9.4%.A year ago, inflation was 2%.
Job ads high
Job ads reached a record 1.85m high in July, with 200k positions being posted each week. The labour market continues to defy fears about a looming recession, although the growth in vacancies has slowed in recent months. The unemployment rate fell to just below 3.8% in the three months to May.
Trade deficit highest on record
The rising price of oil and gas pushed Britain’s H1 trade deficit to its highest level since records began in the mid-1950s. The country will be pushed further into the red later this year, “leaving sterling even more vulnerable than usual,” said one commentator.
Tags:
British Motor Show, Cargiant, Cazoo, CPI, Emil Frey, Great Wall, greenhous, Hedin, Lithia Motors, LMP, NFDA, ORA, Pendragon, Wey 
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