Pendragon’s board expects the AM100 car retail PLC to “comfortably outperform” its previous expectations for 2023 after delivering a 23% rise in underlying pre-tax profits during Q1.
Underlying PBT grew by around £4 million, to £23m, during the three-month period to March 31 as strong margins were maintained alongside a 20.1% uplift in new car sales and 14% growth from its used car operations.
In total, Pendragon’s Motor Division delivered an operating profit up 38.7% year-on-year to £28.3m, a trading statement published via the London Stock Exchange revealed this morning (April 15).
Analysts at Zeus Capital increased the group’s underlying pre-tax profit forecast for 2023 as a whole by 11.7% to £55m in light of the result.
Last month Pendragon reported that the £57.6m underlying pre-tax profit that it made in 2022 had exceeded expectations, despite being a 30.6% drop on 2021’s £83m earnings.
Commenting on today’s Q1 performance statement, chief executive Bill Berman said: “I am delighted to report a very strong performance in the first quarter, which builds on the momentum we generated last year from the progress with our strategic and operational initiatives.
“It is really encouraging to see all of the Group’s divisions in growth, particularly when considering the ongoing challenges in the external operating environment.
“We are seeing improving signs in the production and supply of new cars and we are focused on continuing to deliver for our customers and OEM partners in the months ahead.”
Among Pendragon’s recent challenges have been a cyber attack which ultimately saw the business rebuff of a $60 million ransom believed to be the largest ever demanded from a private company.
The episode was explored in a News Insight feature in the April edition of AM Magazine.
During the Q1 trading period detailed today, the business opened the first of six new BYD electric vehicle (EV) dealerships.
Its expansion with new brands will go -arm-in-arm with development of the CarStore used car retail division – relaunched in 2022 – to drive ongoing growth.
During Q1 Pendragon achieved a new vehicle gross profit per unit (GPU) of £2,686, which was up 9.4% or £230 YoY.
Used car GPU was 17.7% behind Q1 2022’s £1,771 but remains above historic levels at £1,457, the group said.
In aftersales revenues grew by 20.5% like-for-like during the period as L4L gross profit increased by 17.5%.
The Pendragon Vehicle Management (PVM) leasing business recorded an operating profit of £5.2m (Q1 FY22: £4.9m) as the group’s software business, Pinewood, delivered operating profit growth of 14.3% to £3.2m (Q1 FY22: £2.8m).
The group revealed that its operating costs had increased 5.4% on a like-for-like basis and by 2.6% in total during Q1, meanwhile.
In a trading utlook statement, Pendragon’s board said that there were “encouraging signs of improvement in production and supply of new vehicles”, but added that used vehicle supply was expected to remain tight for the foreseeable future.
It added: “The group remains mindful of the macro-economic headwinds including the potential for further interest rate rises and continued inflationary cost pressures, however as a result of the strong performance in Q1 it expects to comfortably outperform the board’s previous expectations for FY23.”