UK car retailers have had a torrid year, but Pendragon (PDG) is faring better than most. Commercial performance has improved largely as a consequence of its exposure to the used car market, which has offset weaker new car sales. Like-for-like sales in the former division rose by a fifth, which helped deliver a 12.5 per cent increase in used car gross profit to £92.6m. The aftersales segment also helped soften the impact of the decline in new car numbers. Revenue there rose 6 per cent on an underlying basis, while gross profit improved by nearly 5 per cent to £112m. The embryonic US business is also growing fast despite wider fears about a slowdown in that market. Sales across the pond rose by nearly 30 per cent, while gross profit jumped by more than a fifth to £26.8m.
Closer to home, it’s too early to say whether the FCA’s review of industry lending practices has dampened demand, but new car sales fell 4.3 per cent on a like-for-like basis, while gross profit fell 5.2 per cent to £85.2m. But Pendragon accounts for UK Motor sales in aggregate, so total revenue still rose 5.4 per cent to £2.23bn, while gross profit rose 2.3 per cent to £263m.
Analysts at Liberum expect pre-tax profit of £70.4m for the year ending December 2017, giving EPS of 3.7p, compared with £75.4m and 3.9p in 2016.
| PENDRAGON (PDG) | ||||
| ORD PRICE: | 30.25p | MARKET VALUE: | £131m | |
| TOUCH: | 30-30.5p | 12-MONTH HIGH: | 39p | LOW: 26p |
| DIVIDEND YIELD: | 5% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 97p* | NET DEBT: | 33% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 2.33 | 41.8 | 2.2 | 0.70 |
| 2017 | 2.47 | 47.1 | 2.6 | 0.75 |
| % change | +6 | +13 | +18 | +7 |
| Ex-div: | 21 Sep | |||
| Payment: | 24 Oct | |||
| *Includes intangible assets of £363m, or 84p a share | ||||
