Just a day after data from the Society of Motor Manufacturers and Traders (SMMT) suggested the UK car industry might be stabilising, Pendragon (PDG) revealed a 41 per cent crash in underlying pre-tax profits to £28.4m for the six months ended June 2018. The company blamed its UK motor division for the slump, which is responsible for the sale and servicing of vehicles in Britain. The division is still in a state of transition, however, as the company prioritises used car sales, including online channels. To this end, the group has reduced “nearly-new” vehicle stocks it holds. Excluding nearly-new vehicles, used car sales actually grew 3.1 per cent against record comparatives, and it’s hoped second-hand vehicles sales will double by 2021 as a result of ongoing work.
Elsewhere, software and leasing continued to do well, with sales up 7.7 per cent and a whopping 35.1 per cent respectively. Eventually, management says it expects double-digit revenue growth from the software business too, especially as dealer management system Pinewood gathers more global traction. Even better, that business brings with it a margin in excess of 85 per cent and strong recurring revenues.
As per consensus expectations compiled by Bloomberg, analysts expect EPS of 3.4p this year, compared to 3.3p in 2017.
| PENDRAGON (PDG) | ||||
| ORD PRICE: | 24p | MARKET VALUE: | £ 338m | |
| TOUCH: | 23.95-24p | 12-MONTH HIGH: | 34.5p | LOW: 20p |
| DIVIDEND YIELD: | 6.7% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 32p* | NET DEBT: | 24% | |
| Half-year to 30 June | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 2.47 | 47.1 | 2.6 | 0.75 |
| 2018 | 2.48 | 27.3 | 1.5 | 0.80 |
| % change | +0.2 | -42 | -42 | +7 |
| Ex-div: | 20 Sept | |||
| Payment: | 23 Oct | |||
| *Includes intangible assets of £363m or 26p a share | ||||
