Last October’s profit warning meant the market didn’t expect much from Pendragon’s (PDG) full-year results. But a better-than-expected fourth quarter actually sent the shares soaring on results day, despite the pre-flagged 20 per cent plunge in underlying pre-tax profits to £60.4m.
It’s been a difficult time for motor retailers, as poor consumer confidence in the wake of the Brexit vote and the government’s diesel policy bears down on industry-wide sales of new cars. Revenues from this division fell 4.9 per cent last year, but Pendragon's used car sales held up much better, rising 15.3 per cent on an underlying basis. Gross margins also staged an unexpected recovery in the final quarter, across both used and new vehicles, compared with an 80 basis point contraction reported during the preceding 12 weeks. The after-sales division also did well, reporting a 6.9 per cent improvement in underlying revenues, reflecting a growing number of vehicles on the road in the UK.
Prior to these results, broker Liberum expected EPS of 3.2p for the year ending December 2018, rising to 3.4p the year after.
| PENDRAGON (PDG) | ||||
| ORD PRICE: | 24p | MARKET VALUE: | £340m | |
| TOUCH: | 23.9-24.2p | 12-MONTH HIGH: | 39p | LOW: 20p |
| DIVIDEND YIELD: | 6.5% | PE RATIO: | 6 | |
| NET ASSET VALUE: | 30p* | NET DEBT: | 29% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 3.90 | 38.9 | 2.8 | 0.35 |
| 2014 | 4.00 | 64.6 | 3.5 | 0.90 |
| 2015 | 4.45 | 79.0 | 5.0 | 1.30 |
| 2016 | 4.54 | 73.0 | 3.8 | 1.45 |
| 2017 | 4.74 | 65.3 | 3.7 | 1.55 |
| % change | +4 | -11 | -3 | +7 |
| Ex-div: | 19 Apr | |||
| Payment: | 23 May | |||
| *Includes intangible assets of £369m, or 26p a share | ||||
