A Pendragon showroom
(Picture: Pendragon)Car dealership Pendragon revealed a rise of almost a third in the selling price of a used vehicle as supply shortages and inflation provided the “backdrop” to trading in the first half of the year.
The operator of the Evans Halshaw and Stratstone brands said the average price of a used car reached £18,965, up 32%. Its underlying profit fell by almost 5% to £33.5 million after underlying cost increases of almost £21 million.
It called macro-economic conditions “challenging” and said they were expected to continue in the second half, but stood by its existing guidance for the full year.
Pendragon revealed the demise of takeover talks in August, with an unnamed suitor which it referred to as a “large international corporate”. The bid, reported to value the firm at £460 million, floundered after one of Pendragon’s five biggest existing shareholders refused to join the talks.
Bill Berman, chief executive, said the offer demonstrated “great interest in the strength of our strategy and the prospects for the group,” adding: “Whilst this proposal did not proceed, the Board considered that it merited discussion with our shareholders.”
Julie Palmer, partner at Begbies Traynor, said: “A shortage of microchips needed to build modern cars means that dealers like Pendragon are struggling to get their hands on vehicles to sell, pushing up prices.
“The cost-of-living crisis and soaring inflation means that cash-strapped consumers may have no choice but to hold on to their cars for longer, just as production normalises and new vehicles come flooding into the market.”
Pendragon’s stock fell 1% to 23p on Wednesday. According to the August bid reports, the potential offer then was priced at 29p per share.
