Pendragon

[YeeWo]

Pendragon (UK's largest Car Dealership) @ 31.75p has a Yield of 3.8% and on PE ratio of circa 6.

Opinions gratefully sought........!!!

[nk104]

Well a lot of the car dealers look cheap at the moment. Vertu and Cambria have similar metrics. In a fit of weakness I bought some Marshall a couple of months ago.

But they've all been punished recently, fears of recession etc. I remember reading that with the advent of personal contract plans, a lot of the money for the dealers will come through servicing, even if the new car market goes off a cliff.

[nigelpm]

At the very high level.

Know the industry pretty well - very difficult times. Lots of consolidation but just no money in it anymore.

[YeeWo]

At the very high level. Know the industry pretty well - very difficult times. Lots of consolidation but just no money in it anymore.

Do you mean the Pendragon SP is "at the very high level"?! I've held Inchcape for Years and therefore do keep reasonably well read also. I was watching an interview with Dash Gupta (ex-Inchcape) who is now running Marshall Motor Holdings (LON:MMH), he was talking about consolidation and how MMH are participating. I agree that the level of consolidation happening must be an indication that everything isn't OK.

https://www.youtube.com/watch?v=5Uy8iDqA-6U

Trevor Finn is now 58 years old and Martin Casha must be of a similar age. Mr Finn holds 18,216,623 and Mr Casha 15,930,170 Pendragon shares, they have been running the business since it was de-merged from Williams PLC in 1989. Pendragon always had a lot of debt, however this is being paid down at a fair whack and Pendragon has also recently been engaging in some buy-backs. I have a feeling Management may well be putting the business into a condition where it is well worth acquiring as part of the above mentioned consolidation. Crispin Odey has circa 220 million Pendragon shares and may well wish to cash out also, I guess his position is key.

My powder is dry at the moment, I really need to work-out what will be the key indicator that will tripper my hitting the Buy button!!

[nigelpm]

No I mean at the macro level as in high level.

I don't purport to have a detailed understanding of Pendragon but the industry has huge challenges in general.

[PeterGray]

Know the industry pretty well - very difficult times. Lots of consolidation but just no money in it anymore.

Interesting, Nigel. Do you think margins are being hit by internet sales? My last car was around 15% less via an internet broker than the local dealer wanted.

Peter

[nigelpm]

Know the industry pretty well - very difficult times. Lots of consolidation but just no money in it anymore.

Interesting, Nigel. Do you think margins are being hit by internet sales? My last car was around 15% less via an internet broker than the local dealer wanted.

Peter

Absolutely, car supermarkets started it and now the likes of carwow are making it very tough.

Also, as cars have got significantly more reliable and people keep them longer second hand prices have held up more.

Little margin in new cars, more in servicing.

[thebuffoon]

Yes, far better margins from servicing and secondhand car sales, although new car sales are holding up.

If you have a warranty you have to have the car serviced at the specified intervals. That and repairs is where the money is.

People seem to have a perception that car dealers are, or will be doing badly. I own CAMB, and they are doing fine; not to mention the freeholds they own.

Buffy

[nigelpm]

Yes, far better margins from servicing and secondhand car sales, although new car sales are holding up.

If you have a warranty you have to have the car serviced at the specified intervals. That and repairs is where the money is.

People seem to have a perception that car dealers are, or will be doing badly. I own CAMB, and they are doing fine; not to mention the freeholds they own.

Buffy

Ah, yes Cambria - got a fantastic management team - edge towards the premium end.

[SwissPaul]

Jaysus - do they want blood?
Down 10% today on this - I weep
Cambria Automobiles' revenue increased by 17.3% to £614.2m inthe year to the end of August.

Underlying profit before tax rose by 37.7% to £10.6m (2014/15: £7.7m). Profit before tax also improved by 53.2% to £11.8m (2014/15: £7.7m) and the group delivered underlying earnings per share of 8.33p (2014/15: 6.08p) - an increase of 37.0%. The group closed the year with net cash of £0.4m (2014/15: net cash £1.0m) and net assets of £42.1m (2014/15: £33.7m), underpinned by the ownership of £41.3m (2014/15: £37.6m) of freehold and long leasehold properties.

Chief executive Mark Lavery said: "The Group has delivered a strong set of full year results in its 10th year of trading. From a starting Share Capital base of £10.8m with no further issuance in 10 years, we have delivered underlying Profit Before Tax of £10.6m in the period, up from £7.7m in the previous year, a 37.7% increase.

"Over the 10 year period we have acquired a freehold and long leasehold property portfolio in excess of £41m. In the year we have made a number of strategic acquisitions and disposals and significantly progressed our investment programme to meet the requirements of our manufacturer partners franchise standards.

"Our sales exceeded £600m for the first time, and the acquisitions that we have made will contribute to revenue growth in the next financial year. The businesses acquired are directly in line with the strategy we laid out in 2013 which was to acquire earnings accretive businesses that strengthen our premium and high luxury portfolio in focused geographical areas and deliver enhanced shareholder returns. I am pleased with the investments that we have made during the course of the year.

"It remains too early to assess the full implications of the UK electorate's decision to leave the EU, however we appreciate that the UK economy is in a period of uncertainty post the EU referendum vote in June 2016. At the time of writing the Sterling exchange rate has been very volatile and in recent weeks reached its low point equivalent to summer 2011.

"In the years following 2011 we have seen significant year on year growth in UK new car registrations as Sterling has strengthened relative to the Euro. The current volatility in Sterling could impact the strategy adopted by the manufacturers that we represent. The latest SMMT forecasts for new car registrations in 2017 show a 5% reduction on the 2016 closing forecast. From April 2016 to October 2016 there has been a 2.7% year on year reduction in the Private segment of the new car market.

"Post the period end, trading in the important plate change month of September was in line with expectations, however October trading showed some softening in new car margins.

"The Board remains confident that Cambria's resilient business model is well positioned to take advantage of any opportunities that the current economic uncertainty could provide. The Board has set its focus for the new financial year on delivery of the important integrations of the acquired businesses along with the property investments that are needed to bring those businesses up to manufacturer standards, increase capacity and provide our Guests with a superior experience."
I hold and will add

[YeeWo]

"Pendragon PLC said Friday that Chief Executive Officer Mark Herbert purchased GBP91,750 in shares. Herbert bought 500,000 shares at a price of 18.35 pence per share. His total holding in the company following this deal has not been disclosed. Shares in the car dealership operator closed 0.1% lower at 17.90 pence on Friday."- dayolaniyan@alliancenews.com

Same strategic dilemma(s) exist as in narrative above circa 2016. It must be said a) Mark Herbert is very well regarded ex Jardine Matheson executive & b) It does seem Mr Herbert is putting his hands in his own pocket to the tune of £91k.

A Strategic Review has just been completed by the new management led by Mr Herbert, I have funny feeling a wee-bit of "kitchen-sinking" has gone on. Opinions gratefully received........GLA!

[YeeWo]

Released : 27/06/2019

RNS Number : 5743D
Pendragon PLC
27 June 2019

Pendragon PLC ("Pendragon" or the "Company")

Directorate Change

Pendragon PLC ("the Company") today announces that Mark Herbert will be leaving the Company by mutual agreement with effect from 30 June 2019. Accordingly, Mr. Herbert will cease to be Chief Executive Officer and a Director of the Company with effect from 30 June 2019.

The Company has commenced a formal process to recruit and appoint a new Chief Executive Officer and a further announcement will be made in due course.

Until such an appointment is concluded, Executive Directors Martin Casha (Chief Operating Officer) and Mark Willis, (Chief Financial Officer) will lead the business on a day to day basis, reporting to Chris Chambers, the Chairman.

As a result of the change to the management team, it is envisaged that the strategic update originally scheduled for late September will now be postponed until the appointment of a new Chief Executive Officer is concluded.

Chris Chambers, Chairman of Pendragon PLC said:

"The Board remains fully committed to realising the long-term strategy. In the nearer term, despite challenging market conditions and the costly stock reduction programme, our focus will remain on taking steps to improve the performance of the business as outlined in our recent Financial and Operational Review."