Pendragon's £57.6 million profits 'exceeded 2022 expectations'

The £57.6m underlying pre-tax profit that Pendragon made in 2022 has exceeded expectations, despite being a 30.6% drop on 2021's £83m earnings.

The AM100 motor retailer, which trades under the Stratstone and Evans Halshaw brands, had been expected by market analysts to deliver £49m.

Its results for 2022 show that revenue grew by 4.9% to £3.62 billion, and operating profit declined just 6.1% to £101m.

Chief executive Bill Berman said: "We delivered a resilient trading performance against a challenging backdrop last year.

"These results clearly demonstrate the strength of our operations, and it is all underpinned by the great strides we are making against our strategy which ensures we are well placed to meet the needs of our customers and OEM partners, and to create value for all of our stakeholders."

Pendragon recently announced that it is a retail partner for Chinese carmaker BYD, which begins sales of its EVs in the UK this spring, and it has already opened two dealerships with another four in the pipeline.

Berman said the launch in 2022 of Pendragon's own online used car marketplace, CarStore.com, provides a platform for around 12,000 used cars across the group's brands and the market outperformance of the used car division in the second half of 2022 shows that the investment is bringing benefits.

After an exceptional 2021 used car market in the UK, in 2022 Pendragon's used vehicle gross profit per unit held almost flat at £1,607 (£1,670 in 2021).

New vehicle gross profit per unit was up by £808 to a record high of £2,719, although sales volumes fell by 6.1% on a like-for-like basis.

Developments at Pinewood, Pendragon's software and dealer management system business, include integrating used car valuation tools and open banking tools, while the dealerships have new processes including enhancements to customer journey management and aftersales booking.

Berman added: “We finished FY22 with good momentum, and trading has been positive in the first two months of FY23.

"We remain mindful of the potential headwinds from challenging macro-economic conditions. However, we continue to expect our ongoing operational initiatives and growth opportunities to more than offset operating cost inflation within the business this year and the board remains confident in the prospects for the group in 2023.”

During 2022 Pendragon was scrutinised by two prospective acquirers from overseas. Sweden's Hedin Group made a 29p per share bid for the AM100 group but withdrew from the deal in December citing challenging economic conditions, and US-based Lithia, which has just acquired Jardine Motors Group, was reportedly exploring a takeover of Pendragon.