Pendragon has said that car sales growth in Q4 helped propel it to a “better than expected” 2022 financial performance in a trading update published this morning (January 25).
The AM100 car retail PLC’s chief executive, Bill Berman, said that the business had “closed out the year with a positive performance” to deliver an expected underlying profit before tax of approximately £57 million – ahead of expectations but down 31.3% on 2021’s record £83m.
Its trading update for the year to December 31 stated that its strong underlying trading performance had more than offset higher operating and interest cost pressures, with like-for-like new car sales up 4.6% and used cars up 5.2% in Q4.
Pendragon revealed that it had also been able to improve its financial position during 2022 trading, ending the year with with adjusted net debt of £23m, down 53.7% on the prior year-end’s £49.7m.
Berman said: “We closed out the year with a positive performance in the final quarter, which saw volume growth in both new and used vehicle sales.
“Despite the numerous challenges we have faced across our markets and in the economy at large, we performed strongly in 2022 and this shows the benefits of the improvements made across the business in recent years.
“Whilst market challenges will persist in 2023, we enter this new year with confidence and good momentum, and we look forward to making further progress against our strategic objectives.”
Pendragon started last year with a focus on the re-launch its CarStore division with a new hybrid sales model designed to remove the “restrictive” process of traditional retail and new online rivals
The move was part of a growth strategy which it hopes will deliver an underlying profit before tax of £85m to £90m by 2025.
Last year saw the business attract takeover bids from Swedish car retail group Hedin Automotive and US-based Lithia Motors.
Lithia is now in advanced talks to acquire Jardine Motors Group after its bid failed, while Hedin withdrew its “highly conditional offer” after entering the UK market with the acquisition of Mercedes-Benz Retail Group’s four remaining London locations.
Looking forward to 2023 trading, and beyond, Pendragon said in today’s trading update that it was pleased with the operational and financial performance during 2022 as well as the continued progress made towards its long-term goals.
It added: “We expect constraints in both new and used vehicle supply to continue into 2023, however, the new car order bank remains strong and there are some early signs that new car supply may be beginning to improve which we expect to drive growth in new car volumes during 2023.
“We expect our ongoing initiatives and growth opportunities to more than offset operating cost inflation within the business. Accordingly, the board remains confident in the prospects for the group in the year ahead.
Pendragon expects to publish its preliminary 2022 financial results on March 22.