Full Year Results to 31st December 2019
18th Mar 2020
- Group Revenue £4,506.1m +3.8% LFL (-2.6% total)
- Underlying (Loss) / Profit Before Tax £(16.4)m loss (2018 : £47.8m profit). H1 underlying loss of £(32.2)m loss,
- H2 underlying profit of £15.8m
- Non-Underlying Charge of £97.7m (2018 : £92.2m charge) including a non-cash charge principally for impairment of goodwill and non-current assets of £130.2m.
- Loss After Tax £(117.4)m (2018 : £(50.5)m loss)
- Dividend – The Group is not proposing a final dividend for FY19 (2018: 0.7p)
- Net Debt – £119.7m (FY18 : £126.1m), down 5.1%
- A full market and operating model assessment of Car Store was completed during H1, which confirmed there is a significant and attractive market opportunity and that the proposition is well received by its target customers.
- Following this, a clear roadmap of short-term and long-term steps were established. The short-term actions included the closure of 22 Car Stores and one preparation centre in H2. In addition, following a review of capacity, a further preparation centre was closed.
- Significant performance improvements in the remaining 12 stores since the closure programme was completed, with underlying operating losses from the remaining 12 stores reducing to £(1.1)m in the fourth quarter. Further improvements are targeted during 2020.
Franchised UK Motor
- H1 reported underlying operating loss of £(7.7)m (H1 2018 : £31.8m) , H2 reported underlying operating profit of £20.7m (H2 2018 : £21.2m).
- H1 2019 was impacted by the previously disclosed clearance of used car stock from excess levels.
- Used car gross margins stabilised at 7.8% in H2 vs 4.9% in H1.
- Further progress has been made with right-sizing the Franchised UK Motor operation with 6 Jaguar
- Land Rover sites either disposed of or closed in FY19.
- While market conditions remained challenging during H2, with the new car market down (1.1)%. The Group outperformed the new car market in the period, with H2 like-for-like new car unit sales growth of 2.3%.
- Underlying operating costs were well managed in H2 and on a proforma comparable IAS 17 basis, in total were down 5.6% (down 0.8% on an LFL basis) as a result of the previously announced cost reduction programmes.
Software - Pinewood
- Underlying operating profit up 14.5% to £13.4m (2018 : £11.7m).
- The software business continues to perform well, with continued international expansion.
- Additional customers were added in multiple territories, including Norway and Sweden during 2019.
Leasing – Pendragon Vehicle Management
- Underlying operating profit down 13.5% to £12.8m (2018 : £14.8m), as a result of the previously disclosed provision release of £2.8m in FY18.
- Continued high return on investment from a low capital base.
- Valuable source of used car stock to the group.
US Motor Group
- Disposal of two franchise locations in 2019 (Mission Viejo and Newport Beach) for a combined consideration of £59.3m.
- This followed the initial disposal of Newport Beach Aston Martin in 2018 for £3.1m.
- Puente Hills Chevrolet disposal was completed in February 2020 for consideration of £16.5m.
- Discussions for the remaining two sites in the US Motor Group are continuing.
- On target for expected total gross proceeds from the combined sale of US assets of c.£100m pre-tax.
Board and management changes
- A number of Board and senior management positions have been added to strengthen the business to support its future growth potential.
- Bill Berman appointed as Chief Executive Officer.
- Two new Non-Executive Board members appointed.
- New roles of Chief Information Officer and Chief Marketing Officer created and appointed.