What Pendragon (PDG) calls “macro newsflow” – and the adverse effect it’s had on its recent financial performance – is open to interpretation. Most likely, it refers to the continued political and economic uncertainty regarding the UK’s departure from the European Union (EU), which has coincided with a prolonged period of poor consumer confidence and a subdued new car market. The latter is naturally cyclical, but demand issues – it’s not unfair to assume – have been exacerbated by weak sterling and an unclear future when it comes to vehicle imports and exports.
Last year, Pendragon’s new car sales fell 3.8 per cent in total, marking an outperformance against wider market declines of 6.8 per cent, although gross profits in this segment dropped more than 8 per cent as a result of margin pressure on premium brands. Used vehicles fared better, but it wasn’t enough to stop the group missing its own post-profit-warning guidance. What’s more, adjusted pre-tax profits of £47.8m were actually supported by £2.8m made in the leasing division.
Analysts at Liberum still expect full-year pre-tax profits of £47m, giving EPS of 2.6p, compared with £46.6m and 2.6p in 2018.
| PENDRAGON (PDG) | ||||
| ORD PRICE: | 26.7p | MARKET VALUE: | £373m | |
| TOUCH: | 26.7-26.8p | 12-MONTH HIGH: | 31p | LOW: 21p |
| DIVIDEND YIELD: | 5.6% | PE RATIO: | NA | |
| NET ASSET VALUE: | 25p* | NET DEBT: | 37% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 4.00 | 64.6 | 3.5 | 0.9 |
| 2015 | 4.45 | 79.0 | 5.0 | 1.3 |
| 2016 | 4.54 | 73.0 | 3.8 | 1.5 |
| 2017 | 4.74 | 65.3 | 3.7 | 1.6 |
| 2018 | 4.63 | -44.4 | -3.6 | 1.5 |
| % change | -2 | - | - | -3 |
| Ex-div: | 18 Apr | |||
| Payment: | 30 May | |||
| *Includes intangible assets of £274m, or 20p a share | ||||
