22 March 2023

Pendragon has seen its full year underlying pre-tax profits for 2022 drop 30.6% to £57.6 million (from £83.0m in 2021) on a turnover of £3.62 billion (up 6.1%), slightly ahead of market expectations.

Commenting on the group’s outlook, CEO Bill Berman repeated his mantra that growth would offset rising costs: “We continue to expect our ongoing operational initiatives and growth opportunities to more than offset operating cost inflation within the business this year and the Board remains confident in the prospects for the Group in 2023.”

While underlying costs rose 10.4% in 2022, Pendragon cut its adjusted net debt by £26.4m from £49.7m in 2021 to £23.3m in 2022.

Pendragon CEO Bill Berman

The results come after a year of takeover speculation from major shareholder Hedin Group, which ended in December, and US retailer Lithia – which has just bought Jardine Motors.

Commenting on the results, Berman said: “We delivered a resilient trading performance against a challenging backdrop last year.

“During the year we have continued to invest in strategic initiatives across the business that drive growth. We launched CarStore.com, which is now our primary marketplace for all our used car inventory. The platform lists approximately 12,000 cars across our brands, more than any of the new platforms that have entered the market since 2019 and the market outperformance of our used car division in the second half showed the benefits of our investment in CarStore.com. We also invested more than ever before in Pinewood to further maximise the benefit that our DMS technology brings both to our external customers and to our business, where it is powering improvements made across our portfolio. We further expanded our new car representation after being selected by BYD, the world’s largest new energy vehicle manufacturer, to be a UK launch partner in 2023.”

In the group’s results statement commenting on how 2023 has started, Pendragon said March had started with “good momentum” and that new car supply was improving. Pendragon had a new car order bank of 22,000 vehicles at the end of 2022.

While Berman said Pinewood had brought benefits to Pendragon, the results showed a 12.0% fall in operating profit for the software division due to increased costs.

Gross margins for used cars were down at 7.9% in 2022 against 9.6% in 2021. Gross profit per unit ended the year at £1,607 (£1,670 in 2021).

New car margins were up to 9.1% compared with 7.3% in 2021.

Tags: Bill Berman, Pendragon