Britain’s largest car dealer expects a pre-tax profit of £60m this year
Britain’s largest listed car dealer Pendragon has warned on full-year profit, blaming weak consumer confidence and the consequent price correction in the used car market.
The share in the company declined by more than 18 per cent in early trade.
“We expect the new car market to continue to decline this year and the first half of next year as car manufacturers continue to adjust to the reduced level of demand for new cars,” the company said, along with the announcement that its Chairman Mel Egglenton has stepped down for personal reasons and has been replaced by Chris Chambers, a non-executive director since 2013.
The company, which runs the Evans Halshaw and Stratstone outlets, says the demand for new cars has slumped in recent months and the group is experiencing “unprecedented pressure” in the premium sector “caused by certain manufacturers continuing to force vehicles into the market despite softening demand”.
According to Reuters, the group is now expecting a pretax profit of £60m this year while its previous expectations had been for £75.2m. The firm is focussing on developing its software and online technologies to fulfil customers’ vehicle and servicing needs.
“During the quarter (to Sept. 30) as consumer confidence waned we experienced significant market pressure,” said the firm.
Pendragon, hich is one of Europe’s largest dealers, is reportedly expecting its used car volumes to continue to grow and expecting to return to profit growth in 2018.