Strong Q3 result for Pendragon with 14% uplift in new car sales volume

AM100 group Pendragon said gross profit for the three months to September 30 was maintained at the “exceptional level” seen last year as it outperformed the overall UK new car market.

New vehicle volumes, although  still impacted by reduced supply, were up in Q3 by 14.2% at Pendragon, versus a national market down 0.1%, and GPU of £2,597 was up £743 versus Q3 2021.

However used vehicle volumes were down year-on-year and GPU of £1,561 was lower than the "exceptional levels" of Q3 2021, when GPU reached £2,052..

Pendragon said it remains confident in delivering progress towards its long-term goals and, despite a challenging economic backdrop, expects full-year underlying profit before tax in line with its expectations.

In the third quarter, underlying pre-tax profit was £14.7m, down £10.4m on last year.

"While supply chain challenges and other market pressures are set to persist, we are confident we have the right strategy in place to deliver for our customers and partners, and to meet our expectations for the full year,” said chief executive Bill Berman.

Aftersales revenue grew by 5% and the gross margin rose to 51.7% from 50.3%, resulting in a 7.8% increase in gross profit.

"The strong performance in new cars and aftersales broadly offset the lower used car volume and anticipated decline in used car margins," Pendragon said.

Outside of its UK motor business, the company, which runs dealerships under the Evans Halshaw and Stratstone brands, said its leasing and software businesses "delivered good performances”.

Bill Berman, Pendragon chief executive said: "We are encouraged that the momentum we saw going into the second half has continued throughout the third quarter.

"Our agile and diversified business model positions the business well to respond to the uncertain environment, as demonstrated by the outperformance in new vehicles and the strong margin profile of the broader UK Motor division.

"While supply chain challenges and other market pressures are set to persist, we are confident we have the right strategy in place to deliver for our customers and partners, and to meet our expectations for the full year."

It comes a day after the London Stock Exchange confirmed an extended deadline for takeover talks with Sweden-based Hedin Group.

The quarterly update statement today made no reference to a recent cyber security incident, in which Pendragon was reportedly asked to pay a $60m ransom to hackers who had attacked its IT systems.