Pendragon PLC INTERIM MANAGEMENT STATEMENT (5812W)
April 28 2016 - 2:01AM
UK Regulatory
TIDMPDG
RNS Number : 5812W
Pendragon PLC
28 April 2016
PENDRAGON PLC INTERIM MANAGEMENT STATEMENT (ISSUED
28-APRIL-2016)
This Interim Management Statement for Pendragon PLC, the UK's
leading automotive online retailer, covers the period from 01
January 2016 to 27 April 2016. Unless otherwise stated, figures
quoted in this statement are for the three months ended 31 March
2016.
Trevor Finn, Chief Executive:
"Our first quarter underlying profit before tax increased by
8.7% which is testament to our continued delivery of our strategy.
We remain focussed on initiatives which provide choice, value,
service and convenience to our customers. Many of our initiatives
are orientated around online consumer activity, from research of
vehicles to the nationwide availability of a vehicle. We are
expecting to see growth in profitability across aftersales, used
and new for the full year as we continue to benefit from favourable
market conditions and further implement our winning retail
initiatives. We are expecting the Group to perform in line with
expectations for the full year."
Highlights
-- Our underlying profit before tax increased by 8.7%.
-- Like for like gross profit increased across all our main
vehicle sectors of aftersales, used and new, due to a combination
of market dynamics, our customer initiatives and our clear
strategy.
-- Aftersales gross profit increased by 1.2% on a like for like basis.
-- Used gross profit increased by 4.2% on a like for like basis.
-- New gross profit increased by 15.2% on a like for like basis.
-- Online visits to Stratstone.com and Evanshalshaw.com increased by 18.5% in the period.
-- In the period we opened three stores in Bristol, Norwich and
Peterborough, all new territories for us. We will acquire further
sites this year to supplement our national footprint.
-- Our target debt : underlying EBITDA ratio continues to be
significantly below our target range so we are assessing the best
use of funds.
Trading Update
We operate our core business in the used, aftersales and new
vehicle sectors under the Evanshalshaw.com and Stratstone.com
brands. We also have a number of support businesses in the
associated markets of dealer IT systems, vehicle leasing and
parts.
Aftersales is our largest profitability contributor. In the
period, aftersales gross profit grew by 1.2% on a like for like
basis. The Group is benefiting from the increased new vehicle
supply which continues to increase the less than three year old car
parc and the four to six year old car parc. We continue to develop
our product and service offering to our customers by providing
transparent online interactions, from the point of online service
booking through to online video of the vehicle for servicing.
Our key strategy of focussing on used profitability continues to
enhance the market share and profitability of the Group. Used gross
profit grew by 4.2% in the period on a like for like basis.
New gross profit on a like for like basis increased by 15.2% in
the period, largely as a result of margin improvement from
Evanshalshaw.com. We are not expecting to maintain this level of
growth in new gross profitability in the remaining part of the
year, as we expect the new vehicle market to operate at more
moderate levels of growth.
Our financial position remains strong, with our debt :
underlying EBITDA ratio remaining significantly below our target
range of 1.0 to 1.5. We are currently assessing our best use of
funds.
Industry Insight
Year to date to 31 March 2016 UK vehicle registrations increased
by 5.1% year on year, with retail registrations increasing by 6.3%
and fleet increasing by 3.9%. For the brands we represent, retail
registrations increased by 3.7%. We expected the level of growth to
slow, as the new market growth becomes more moderate during the
year, and believe the UK market will be around 2.7 million for the
full year 2016, representing growth of around 2.5% over the prior
year.
The used vehicle market increased by 3% in the full year of
2015, following strong growth in the fourth quarter of 2015. We are
still expecting the used car market to grow by around 3% in
2016.
The aftersales market continues to be favourable for the nearly
new vehicle car parc as a result of the new car market increases in
the last three years. We expect the less than three year old car
parc to grow by 5.2% and the four to six year old parc to grow by
4.3% in 2016.
Outlook
As the UK's leading automotive online retailer, we are focussed
on our winning strategy of delivering choice, value, service and
convenience to our customers. We are expecting the growth rate in
the new vehicle market to slow but the underlying market dynamics
in used and aftersales to remain strong. We expect the full year
performance for 2016 to be in line with expectations.
Enquiries
================ =================== ============ ==============
Pendragon
Trevor Finn Chief Executive PLC 01623 725114
================ =================== ============ ==============
Pendragon
Tim Holden Finance Director PLC 01623 725114
================ =================== ============ ==============
Gordon Simpson Partner Finsbury 0207 2513801
================ =================== ============ ==============
Philip Walters Principal Finsbury 0207 2513801
================ =================== ============ ==============
This information is provided by RNS
The company news service from the London Stock Exchange
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