Strong strategic progress contributes to record underlying PBT
- Record underlying profit before tax of £83.0m (FY20: £8.2m)
- New sales performance ahead of franchise average and Used sales ahead of market on a like-for-like basis
- Disciplined strategic delivery driving productivity improvements and stronger margins
- Cost base transformation, costs significantly lower than pre-pandemic levels
Bill Berman, Chief Executive Officer, said:
“We have delivered a really strong set of results, with positive contributions from all parts of our business. Late in 2020, we set out our new strategy to transform our operations and adapt to the fast-changing retail environment. Our focus since then has been on creating value through the delivery of this strategy and we are seeing the operational and financial benefits of this hard work in our results today.
“Our sector has experienced a unique set of trading conditions during the period and I am delighted with how we have performed in this environment. We have made the most of the favourable market dynamics to deliver record underlying profits and we have also reported a return to profit for CarStore, our relaunched, used car brand.
“We expect existing supply chain constraints to continue in the current year, and we are mindful of the potential for further disruption to new vehicle supply chains as a result of the conflict in Ukraine. Despite this, we have the right strategy in place and we expect to make positive progress towards our long-term goals this year.”
Group Financial Highlights
|FY21 £m's|| FY20 £m's
||Total Change %||Like-for-like1 change %|
|Underlying Profit Before Tax||83.0||8.2||912.2%|
|Profit / (Loss) after tax||61.5||(24.7)||n/a|
|Adjusted Net Debt2||(49.7)||(100.4)||-50.5%|
1 Like for like (LFL) results only include trading businesses which have comparative trading periods in two consecutive financial years. Reconciliations of the like for like figures to the total reported figures can see seen in Note 1 - Alternative Performance Measures.
2 Adjusted Net Debt - All loans and borrowings less cash and cash equivalents less IFRS 16 lease liabilities less vehicle stocking loans.
Strong financial performance
- Increase in Group Revenue of 18.0% to £3,449.9m (FY20: £2,924.6m). Revenue up 27.1% on a like-for-like basis.
- Record underlying profit before tax of £83.0m, up 912.2% from the previous year (FY20: £8.2m).
- After non-underlying items the Group reported profit before tax of £73.3m (FY20: loss of £29.6m).
- Cost restructuring resulted in Group underlying operating expenses £121.0m lower than pre-pandemic in FY19, whilst gross profit is down just £31.4m in the same period, driving higher profitability.Adjusted net debt reduced by £50.7m to £49.7m, including the repayment of £28.9m of VAT deferred from FY20.
Disciplined strategic delivery
- Strong progress with strategy to "transform automotive retail through digital innovation and operational excellence" with a large number of new initiatives delivered across the Group.
- Significant progress to unlock value in UK Motor, with material changes to digital capabilities and operational efficiency.
- Pinewood development powering Group's digital capabilities.
- CarStore relaunched with new website, full omnichannel purchasing journey and a revised customer proposition.
- Appointment of experienced Non-Executive Chairman, Ian Filby.
- Performance over the first two months of FY22 has been good, with underlying profit in January and February ahead of 2021. Supply constraints in both new and used cars have continued to support higher gross margins. Both new and used margins are expected to reduce during the course of 2022 from extraordinary levels achieved in 2021.
- The shortage of new cars is expected to continue during FY22. The Board are conscious of inflationary cost pressures in labour and utilities in particular, which combined with the impact of business rates reverting to full levels will result in higher costs in FY22. We are mindful of the further impact that the conflict in Ukraine may have on both supply and costs.
- We remain confident we have the right strategy in place and we expect to make positive progress towards our long-term goals this year, and expect to deliver underlying profitability before tax in line with the Board's expectations.
Conference call and presentation
A presentation for sell-side analysts on Pendragon's full-year results will be held at 9.00am today and this will be followed by a Q&A session with the management team. Should you wish to listen to a live broadcast of the presentation and Q&A, please contact firstname.lastname@example.org to request the conference call details.
To view a webcast recording of the presentation, please click here.
Jefferies International Limited (Financial Adviser & Joint Corporate Broker) (+44 20 7029 8000)
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