The UK’s largest car retailer Pendragon has announced that it is
to cut 500 jobs, as a response to “difficult and competitive
trading conditions”.
Despite the ominous news in its pre-closing
statement, Pendragon confirmed that it remained “profitable
and cash generative”, with sales volumes remaining “robust relative
to the market”, with aftersales continuing to perform “well”.
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Michael Vassallo, an analyst at brokers Brewin Dolphin,
described the announcement from Pendragon as “very downbeat” and
slashed his target price for the retailer’s shares from 25p to
10p.
The outlook for Pendragon in coming months looks
gloomy, if, as widely expected, the economy cools further, with car
sales falling further.
Pendragon said: “It is unclear at this time as to whether the
level of activity decline seen in May, which appears to have
continued so far in June, will persist for the remainder of the
year. Our current view is that it will and that there will be a
continuing exposure to any further slowdown in the general
economy.”
It announces its interim results for the year on September 9
2008.
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By GlobalDataMotor Finance Issue: 45 – July 08
Published for the web: July 2 08 12:4
Last Updated: July 7 08 12:57
