A BMW dealer said: “The manufacturer is carrying out a review throughout the network, and we hear that Trevor Finn is out of favour. It looks as though Pendragon’s boss has more bad news to contend with.”
A BMW UK spokeswoman confirms the manufacturer is conducting an appraisal of all 151 BMW/Mini retail points. “Until that is completed, we are saying nothing more,” she added.
Following the introduction of the 2002 Block Exemption regulation, BMW chose to award its UK dealers five-year contracts. The company said that was fair, given the investment required.
In October, BMW will award new contracts.
Their time length has not been revealed, but it might opt for more traditional two-year rolling contracts.
The network review has to be completed in time for BMW to give six-month termination notice periods ending in September on any franchises it chooses to withdraw, so it can than award fresh contracts to replacement motor retail groups.
If confirmed, the loss of even some of its BMW franchises would be another severe blow to Pendragon.
Last year, the group issued a string of profit warnings and its share price plunged.
As at January 7, shares were at a 52-week low of 30p, giving the company a market capitalisation of £196.81m. Pendragon has BMW/Mini outlets in Doncaster, Hull, Chesterfield, Derby, Milton Keynes, Wallsend (near Newcastle-upon-Tyne), Maidenhead, Taplow, Windsor, Aylesbury and Tring.
Finn, chief executive of Pendragon since it was formed in 1990, did not return AM’s calls.
Late last year, he believed the concept of retail super groups remained valid.
In a trading statement just before Christmas, Pendragon announced three sales of surplus properties for £10 million, realising a profit of £6 million.
The value of the group’s property deals was £41.5 million, a profit of £15.3 million.
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