The introduction of Worldwide Harmonised Light Vehicle Test Procedure (“WLTP”) has created disruption in new car sales and uncertainty over new vehicle supply. UK New Car market data for the month of September showed a decline of 20% in new car registrations and a similar trend has continued in October demonstrating the impact of WLTP.
This has caused significant new vehicle supply disruption which gives us cause for concern over the coming months for new vehicle sales and profitability. This will clearly have an effect on the Group.
During the year we have continued to invest in our Used Car business in new start up locations and transformation costs. As announced at the half year we commenced the roll out of our “used car factories” for the refurbishment of used inventory. This accelerated investment is being made in spite of the short term dilutive effect and the significant costs incurred, latest data gives us encouragement for the future growth of this part of the business.
As a result of the combination of these factors our underlying profit before tax for 2018 is expected to be £50m.
Pendragon will publish our Q3 Interim Management Statement on 26 October 2018.