Pendragon crashes as cars sales drop
Shares in Pendragon crashed 23 per cent after Britain’s biggest dealership cut 500 jobs and scrapped its full year forecast as car sales slumped.
The Nottingham-based firm, which owns the Evans Halshaw and Stratstone forecourts, shed the staff from its 15,700-strong workforce to reduce costs – saying it was “difficult to forecast” prospects this year.
The stock closed down 4.5p at 15p, valuing the business at £98.4m. Pendragon, led by chief executive Trevor Finn, said: “In such volatile market conditions the profit outlook for the group this year is difficult to forecast. But the group continues to be profitable and cash generative.”
May saw a “significant decline” in national car registrations, with a 9.5 per cent fall for private new cars and a 15.4 per cent drop in registrations for small business vehicles.
The dealership said: “It is unclear at this time as to whether the level of activity decline seen in May, which appears to have continued so far in June, will persist for the remainder of the year.”
The group had said as recently as 25 April that full-year results would be at the upper end of its forecasts. The firm added: “Our current view is that it will and that there will be a continuing exposure to any further slowdown in the general economy.”
Most analysts agreed that the business was in for a tough year as consumer spending continues to slow. Pendragon, which operates nearly 400 units in the UK and nine in the US, has fallen 54 per cent this year
On top of this Pendragon lost two thirds of its their value in 2007 after the car dealer cut profit forecasts twice in five months which saw second-half earnings plunge 59 per cent as rising interest rates hurt sales.