The UK’s largest car retailer Pendragon has announced that it is
to cut 500 jobs, as a response to “difficult and competitive
trading conditions”.
Despite the ominous news in its pre-closing statement, Pendragon
confirmed that it remained “profitable and cash generative”, with
sales volumes remaining “robust relative to the market”, with
aftersales continuing to perform “well”.
Go deeper with GlobalData
Michael Vassallo, an analyst at brokers Brewin Dolphin,
described the announcement from Pendragon as “very downbeat” and
slashed his target price for the retailer’s shares from 25p to
10p.
The outlook for Pendragon in coming months looks gloomy, if, as
widely expected, the economy cools further, with car sales falling
further.
Pendragon said: “It is unclear at this time as to whether the
level of activity decline seen in May, which appears to have
continued so far in June, will persist for the remainder of the
year. Our current view is that it will and that there will be a
continuing exposure to any further slowdown in the general
economy.” Pendragon announces its interim results for the year on
September 9 2008.
Lookers also feels market pain
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe announcement by Pendragon was quickly followed by one from
Lookers on July 1, which confirmed that the Manchester-based dealer
group was being “impacted” by the “challenging” trading environment
for new and used cars, causing a year-on-year fall in like-for-like
sales. Northern Ireland in particular was mentioned by Lookers as
subject to “disappointing market trends”.
The retailer highlighted its car supermarket business, the
Dutton Foreshaw outlets which it acquired from Lloyds TSB in autumn
last year, and its aftermarket parts division as bright spots amid
the sales gloom.
“Our diversified business model and solid financial structure
give us the flexibility to adapt to the current uncertainties
within the UK and global economies,” Lookers said, adding that it
is reviewing the performance of its business units “in light of the
current tougher market conditions”.
Horners goes under
North-west retailer Horners Motor Group has gone under, it has
emerged, with the loss of up to 73 jobs at two sites in Manchester
and Rochdale. The receivers, from BDO Stoy Hayward, said in a
statement: “Following an immediate business review, the
administrators have, regrettably, had to close both sites with the
loss of the majority of jobs.”
However, there is a chance the sites might be sold to another
group, said business restructuring partner at BDO, Matthew Dunham:
“We remain hopeful of securing a sale of both Horners sites.”
In its last accounts, Horners made a loss of over £560,000 on
sales of £29.7m. The group had been in existence since 1922.
Motor Finance Issue: 45 – July 08
by Jo Tacon ,
Published for the web: July 25 08 12:38
Last Updated: July 25 08 12:41
