Pendragon launches review as it posts loss amid 'challenging' conditions

17th Apr 2019 08:10

(Sharecast News) - Car dealership Pendragon said on Wednesday that it had launched a review of its operations and financial prospects as it reported a loss for the three months to the end of March 2019.Total revenue during the period was up 1.2%, with like-for-like growth of 4.6% and group LFL new revenue growth of 6.3%.However, Pendragon said "challenging" trading conditions meant there was a reduction in margins in new, used and aftersales, leading to a 5.4% decline in LFL new gross profit, a 1.6% drop in LFL used gross profit and a 5% slide in LFL aftersales gross profit."This performance, combined with both a higher level of operating costs and increased losses within Car Store, arising from the ongoing development and maturation of the business...resulted in an underlying loss before tax of £2.8m," the company said. This is around £10m lower than Pendragon had expected for the period. It comprises about £7m from the net impact of higher revenue and lower margins, £2m of additional operating costs and £1m from the lower-than-expected Car Store performance.In light of the update and given the recent appointments of Mark Herbert as chief executive and Mark Willis as chief financial officer, the group has begun a review of its operational and financial prospects, the results of which will be revealed in June.At 0920 BST, the shares were down 5.6% to 23.74p.