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You can find the current article at its original source at https://www.theguardian.com/business/live/2017/oct/23/uk-car-dealer-pendragon-profits-warning-uk-manufacturers-economy-business-live
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| Version 1 | Version 2 |
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| Car dealer Pendragon joins ranks of UK firms issuing profit warnings – business live | Car dealer Pendragon joins ranks of UK firms issuing profit warnings – business live |
| (35 minutes later) | |
| 9.30am BST | |
| 09:30 | |
| Pendragon's profits wilted in the last quarter | |
| Profit warnings are, by their nature, unexpected. But today’s update from Pendragon is a particular surprise, as the company sounded so upbeat less than three months ago. | |
| Back on August 1st, Pendragon declared that it had “a clear path for growth”, after growing its underlying profits by almost 10% in the first half of 2017. | |
| Clearly, the summer and early autumn have been much more challenging than it expected. | |
| Today’s profit warning (online here) shows that Pendragon’s new car business suffered at 20% fall in gross profits in the third quarter of this year. And with sales expected to keep falling into early 2018, it will take some time until profitability picks up again. | |
| Pendragon’s used cars business has also suffered a 20% plunge in gross profits, due to the knock-on effect of the slowdown in the new car business. | |
| It says: | |
| This price correction, which was primarily focussed on some premium brands and therefore affected our Stratstone business, was a reaction to significant numbers of cars being registered and then sold into the market at significant discounts. | |
| This practice drives down the value of younger cars in the market and nearly new inventories (eg dealer demonstrators and loan cars). | |
| City analysts are now demanding answers.... | |
| Pendragon: most shambolic call with City analysts I have ever heard. | |
| Updated | |
| at 9.33am BST | |
| 9.04am BST | 9.04am BST |
| 09:04 | 09:04 |
| Shares in Inchcape, a rival car dealership,have fallen by 4% in early trading. | Shares in Inchcape, a rival car dealership,have fallen by 4% in early trading. |
| That shows that traders believe Pendragon’s woes are part of a wider malaise in the UK economy. | That shows that traders believe Pendragon’s woes are part of a wider malaise in the UK economy. |
| 9.02am BST | 9.02am BST |
| 09:02 | 09:02 |
| The City of London is most unimpressed by Pendragon’s recent performance, says retail analyst Nick Bubb: | The City of London is most unimpressed by Pendragon’s recent performance, says retail analyst Nick Bubb: |
| The profit warning from the normally bullish Pendragon group will go down like a lead balloon in the City today and put pressure on the other Motor dealers… | The profit warning from the normally bullish Pendragon group will go down like a lead balloon in the City today and put pressure on the other Motor dealers… |
| 8.58am BST | 8.58am BST |
| 08:58 | 08:58 |
| Pendragon’s shares are on track for their worst day’s trading in eight and a half-year, says Reuters. | Pendragon’s shares are on track for their worst day’s trading in eight and a half-year, says Reuters. |
| 8.49am BST | 8.49am BST |
| 08:49 | 08:49 |
| Pendragon’s profits warning is the latest sign of weakness in the UK economy, says Connor Campbell of SpreadEx. | Pendragon’s profits warning is the latest sign of weakness in the UK economy, says Connor Campbell of SpreadEx. |
| He writes: | He writes: |
| British car dealership chain Pengdragon plunged nearly 20% after warning on full-year profit, the company struggling with the declining demand for new cars and the impact this has had on the used car market. | British car dealership chain Pengdragon plunged nearly 20% after warning on full-year profit, the company struggling with the declining demand for new cars and the impact this has had on the used car market. |
| It’s the latest sign of retail-woe in the UK, especially among companies dealing with big ticket items, as the household spending squeeze continues. | It’s the latest sign of retail-woe in the UK, especially among companies dealing with big ticket items, as the household spending squeeze continues. |
| 8.44am BST | 8.44am BST |
| 08:44 | 08:44 |
| The Evening Standard’s City expert, Simon English, is aghast at Pendragon’s profits warning: | The Evening Standard’s City expert, Simon English, is aghast at Pendragon’s profits warning: |
| Spectacular profit warning from Pendragon. Looks like the bottom just fell out of the UK car industry. The end of vroom vroom Britain... | Spectacular profit warning from Pendragon. Looks like the bottom just fell out of the UK car industry. The end of vroom vroom Britain... |
| 8.41am BST | 8.41am BST |
| 08:41 | 08:41 |
| In another surprise development....Pendragon’s chairman, Mel Egglenton, has stepped down for personal reasons, with immediate effect. | In another surprise development....Pendragon’s chairman, Mel Egglenton, has stepped down for personal reasons, with immediate effect. |
| The company has appointed Chris Chambers, the senior independent director, to replace him. | The company has appointed Chris Chambers, the senior independent director, to replace him. |
| 8.24am BST | 8.24am BST |
| 08:24 | 08:24 |
| Pendragon shares tumble 20% | Pendragon shares tumble 20% |
| Shares in Pendragon have plunged by almost 20% at the start of trading. | Shares in Pendragon have plunged by almost 20% at the start of trading. |
| They’ve slumped to their lowest level in over four years, as investors react to today’s profits warning from the car dealer. | They’ve slumped to their lowest level in over four years, as investors react to today’s profits warning from the car dealer. |
| Updated | Updated |
| at 8.26am BST | at 8.26am BST |
| 8.15am BST | 8.15am BST |
| 08:15 | 08:15 |
| Pendragon issues profits warning as consumer confidence wanes | Pendragon issues profits warning as consumer confidence wanes |
| Pendragon, the UK car dealership firm, has sent a shiver through the City this morning by issuing a profits warning. | Pendragon, the UK car dealership firm, has sent a shiver through the City this morning by issuing a profits warning. |
| The company, which runs the Evans Halshaw and Stratstone outlets, says that demand for new cars has slumped in recent months, driving down the value of second-hand cars as well. | The company, which runs the Evans Halshaw and Stratstone outlets, says that demand for new cars has slumped in recent months, driving down the value of second-hand cars as well. |
| Pendragon, which is one of Europe’s largest dealers, blames a fall in consumer confidence. It told shareholders that: | Pendragon, which is one of Europe’s largest dealers, blames a fall in consumer confidence. It told shareholders that: |
| The decline in demand for new cars and the consequent used car price correction has impacted this year’s profit outturn..... | The decline in demand for new cars and the consequent used car price correction has impacted this year’s profit outturn..... |
| During the quarter as consumer confidence waned we experienced significant market pressures. | During the quarter as consumer confidence waned we experienced significant market pressures. |
| Pendragon, Britain’s largest listed car dealer, now expects to post full year underlying pre-tax profits of just £60m, down from expectations of around £75m. | Pendragon, Britain’s largest listed car dealer, now expects to post full year underlying pre-tax profits of just £60m, down from expectations of around £75m. |
| Pendragon issues profit warning. Now sees FY adj PTP at £60m vs consensus of about £75m | Pendragon issues profit warning. Now sees FY adj PTP at £60m vs consensus of about £75m |
| Official figures have shown that UK car sales have been falling for the last six months, as people have cut back on big-ticket items. | Official figures have shown that UK car sales have been falling for the last six months, as people have cut back on big-ticket items. |
| Pendragon fears that this trend will continue: | Pendragon fears that this trend will continue: |
| In the premium sector we have experienced unprecedented pressure on new vehicle margin caused by certain manufacturers continuing to force vehicles into the market despite softening demand. | In the premium sector we have experienced unprecedented pressure on new vehicle margin caused by certain manufacturers continuing to force vehicles into the market despite softening demand. |
| We expect new car registrations to continue to reduce for the remainder of this year and into next year with the volume franchise reductions easing first, followed by a normalisation of the registrations of premium vehicles. | We expect new car registrations to continue to reduce for the remainder of this year and into next year with the volume franchise reductions easing first, followed by a normalisation of the registrations of premium vehicles. |
| Today’s gloomy news from Pendragon is the latest in a series of profit warnings. | Today’s gloomy news from Pendragon is the latest in a series of profit warnings. |
| UK-listed businesses have issued 75 profit warnings in the last quarter, up from 45 between April and June. That’s the biggest quarterly rise in nearly six years, according to accountancy firm EY. | UK-listed businesses have issued 75 profit warnings in the last quarter, up from 45 between April and June. That’s the biggest quarterly rise in nearly six years, according to accountancy firm EY. |
| Reaction to follow.... | Reaction to follow.... |
| 7.53am BST | 7.53am BST |
| 07:53 | 07:53 |
| The agenda: CBI industrial trends, political dramas | The agenda: CBI industrial trends, political dramas |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| Today we’ll get a new healthcheck on Britain’s economy, when the CBI issues its monthly industrial trends report. Last month, the survey showed that manufacturing was holding up well, with output growing and exports “firm”. | Today we’ll get a new healthcheck on Britain’s economy, when the CBI issues its monthly industrial trends report. Last month, the survey showed that manufacturing was holding up well, with output growing and exports “firm”. |
| Political drama could also move the markets today, as the Catalonia crisis rumbles on. | Political drama could also move the markets today, as the Catalonia crisis rumbles on. |
| The ball is back in the Catalan parliament’s court, after the Spanish government in Madrid triggered 155 of the Spanish constitution, imposing direct rule. Could Carles Puigdemont, the president of Catalonia, respond by declaring independence?... | The ball is back in the Catalan parliament’s court, after the Spanish government in Madrid triggered 155 of the Spanish constitution, imposing direct rule. Could Carles Puigdemont, the president of Catalonia, respond by declaring independence?... |
| There’s more stability in Japan, where Shinzo Abe is celebrating a general election win. | There’s more stability in Japan, where Shinzo Abe is celebrating a general election win. |
| Abe’s Liberal Democratic party (LDP) and its junior coalition partner Komeito have retained their super-majority, sending the Japanese Nikkei rallying, for its 15th day in a row - a new record. | Abe’s Liberal Democratic party (LDP) and its junior coalition partner Komeito have retained their super-majority, sending the Japanese Nikkei rallying, for its 15th day in a row - a new record. |
| This means that Abe’s “Abenomics” growth strategy, based around ultra-loose monetary policy, will probably continue. He is also expected to try to reform Japan’s constitution, including its pacifist Article 9 which limits the country’s armed forces to self-defence. | This means that Abe’s “Abenomics” growth strategy, based around ultra-loose monetary policy, will probably continue. He is also expected to try to reform Japan’s constitution, including its pacifist Article 9 which limits the country’s armed forces to self-defence. |
| European markets are expected to open cautiously: | European markets are expected to open cautiously: |
| European opening call @LCGTrading$FTSE -2 points at 7521$DAX +9 points at 13000$CAC +5 points at 5377$IBEX -15 points at 10207 | European opening call @LCGTrading$FTSE -2 points at 7521$DAX +9 points at 13000$CAC +5 points at 5377$IBEX -15 points at 10207 |
| Here’s the agenda: | Here’s the agenda: |
| 11am: Germany’s Bundesbank releases its monthly report. | 11am: Germany’s Bundesbank releases its monthly report. |
| 11am: CBI industrial trends report for October. | 11am: CBI industrial trends report for October. |
| 3pm: Eurozone consumer confidence report | 3pm: Eurozone consumer confidence report |
| Updated | Updated |
| at 8.08am BST | at 8.08am BST |