Pendragon reports on strong 2022 performance

Automotive retailer Pendragon announced a strong financial performance in its full-year results on Wednesday.

The London-listed firm said that, despite a challenging environment, it recorded a 4.9% increase in group revenue to £3.62bn, and a 3.6% rise in gross profit value to £457.2m.

Its balance sheet also improved in 2022, with a £26.4m reduction in adjusted net debt.

Investments in strategic initiatives, including technology releases in Pinewood, drove growth in new and aftersales gross profits, the board explained.

Integrated used car valuation tools and open banking tools were also said to have been key enablers for UK motor performance.

Enhanced customer journey management and improvements to aftersales diary management further supported strong margins.

The company said its omnichannel used car platform, CarStore.com, saw a 61% increase in digital traffic since launch last May.

It said the platform currently listed around 12,000 used cars, surpassing any new automotive retail platforms introduced since 2019.

Pendragon added that investments in franchise locations, including Porsche, BMW, Mercedes-Benz, and Land Rover, were completed in 2022, along with the development of a new Car Store in Warrington.

Additionally, the firm was selected as the UK launch partner for Chinese electric vehicle giant BYD.

“We delivered a resilient trading performance against a challenging backdrop last year,” said chief executive officer Bill Berman.

“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.

“During the year we have continued to invest in strategic initiatives across the business that drive growth.”

Berman noted the launch of CarStore.com, which was now Pendragon’s primary marketplace for all of its used car inventory.

“The platform lists approximately 12,000 cars across our brands, more than any of the new platforms that have entered the market since 2019 and the market outperformance of our used car division in the second half showed the benefits of our investment in CarStore.com.

“We also invested more than ever before in Pinewood to further maximise the benefit that our DMS technology brings both to our external customers and to our business, where it is powering improvements made across our portfolio.

“We further expanded our new car representation after being selected by BYD, the world's largest new energy vehicle manufacturer, to be a UK launch partner in 2023.”

Pendragon finished 2022 with good momentum, Bill Berman said, with trading also positive in the first two months of 2023.

“We remain mindful of the potential headwinds from challenging macroeconomic 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.”

Reporting by Josh White for Sharecast.com.