Pendragon Share Discussion Threads

[regvardy999] 17/2/2008 19:47

hi

i spoke to a dealer principal today who told me that he went to a mangers meeting for his area last week 10 out of the 15 dealer principles there had handed their notice in.

I speak to a lot of dealerships and it amazes me how many are running without Dps, sales managers and business managers.

[jabers] 17/2/2008 19:38

It surely cannot be seen as a good move to have lost 2 Renault sites (livingstone and Ediburgh east) as when they were run by Vardy these sites were very profitable , in particular the Livingstone site, the Edinburgh east site was part of their used car site.
PDG have made a real mess of them since taking over and its all down to quality people leaving!

[kfp] 17/2/2008 19:03

They seem to have ignored January tradinf update ?

[sscrabble] 17/2/2008 13:50

from the FT

Car sales could signify a wider splutter
By Neil Hume

Published: February 15 2008 20:17 | Last updated: February 15 2008 20:17

Shares in Pendragon, the car dealer, pushed higher last week amid rumours in the City that it could be a takeover target.

The rumours refocused attention on a sector that suffered a dramatic fall from grace last year.

A combination of profit warnings, gloomy trading statements and worries about the outlook for consumer spending saw Pendragon shares drop 65 per cent in 2007, while Lookers fell 34 per cent and Inchcape shed 25 per cent.

The poor performances were in contrast to the previous couple of years, when the sector enjoyed strong because of consolidation and a realisation that car dealers were sitting on valuable property portfolios. The recent declines say much about how investors have become steadily more gloomy about prospects for the UK economy, and by extension the consumer.

Are investors too pessimistic?

As with many other consumer-facing stocks, car dealers certainly look cheap. Pendragon trades on a forward price/earnings ratio of just over 6, Inchcape around 9 and Lookers 6.5.

But the lowly valuations in part reflect fears that earnings expectations will be not met.

There is good reason to take that view – in January, new car registrations dropped at the fastest rate in 10 months.

If forecasts are not met, share prices could fall much further. Both Lookers and Pendragon traded on much lower multiples in the early 1990s. (Although it is worth noting that, back then, both companies were more dependent on retailing than they are now. Pendragon, for example, now has a parts and leasing businesses.)

In a report called "Drive Carefully" published last week, Citigroup painted a bleak outlook for the sector.

"While we expect greater pressure on volumes in 2008 as the consumer weakens, manufacturers will continue to offer large incentives to shift volumes," analyst James Targett said.

"This suggests margin pressure will remain, although stock levels in the market are lower than last year."

The City will get its first chance to see how 2008 is shaping up for Pendragon when it publishes its annual results next Wednesday. As the UK's biggest car dealer, with nearly 400 franchises, its results are eagerly awaited.

The company may give an indication of how its order book looks for March – one of the two new vehicle registration months – and whether lower interest rates are having any impact.

But given the headwinds facing the car market, the advice from analysts to anyone looking at the sector seems to be "buy Inchcape".

"Our preferred stock in the sector continues to be Inchcape given its unique business model (import and distribution, not just retail), global presence and scope for ongoing acquisitions in emerging markets given its conservative balance sheet," said Mike Allen, analyst at Panmure Gordon.

As for the bid speculation that has helped Pendragon shares climb nearly 12 per cent since the start of the month, analysts were not convinced an offer would emerge. The company was too big to be acquired by one of its UK rivals, they said.

Yet an approach from one of the large US dealers, such as United Auto Group or Group 1 Automotive, could not be ruled out, Mr Targett reckons.

Perhaps a better reason to be buying Pendragon shares is the possibility that the group pays a full-year dividend of 4p. This implies a 12 per cent dividend yield based on last night's closing price of 33¼p.

The factors that drove the consolidation of the sector over the past couple of years – scale and cost-cutting – have not gone away.

But with balance sheets stretched from the last flurry of deals – there have been 14 acquisitions among the larger listed players in the past two years, according to Mr Targett – and credit markets still difficult, further deals seem unlikely in the near term.
Copyright The Financial Times Limited 2008

[sscrabble] 17/2/2008 13:49

in the sunday herald

Pendragon, the UK's biggest car dealership, is expected to confirm that its profits went into sharp reverse on Thursday, when analysts at Brewin Dolphin look for a drop in the annual pre-tax figures from £96.4m to just £34m. Their forecast suggests that the group did little more than break even in the closing months of the year as a result of disappointing sales of both new cars and second-hand vehicles, but directors are still expected to maintain a 2p final dividend.

There has been some speculation that the company could attract a break-up bid because of its property portfolio, although the shares have fallen from 125p to just 32.75p in the past year.

[regvardy999] 17/2/2008 10:28

A lot of renaults are from motability, i visit BCA Measham most weeks and renault is the more popular make for the motab scheme.

[kfp] 16/2/2008 18:23

I dont know if they lost Renault would be a bad thing.
Bristol Manheim auction had about a third of one auction hall entries were from Renault direct and they have them every week so they are not selling it seems.
Overproduction & cuts will be the next buzz word on car makers lips.
Good for the market in the end.

[jabers] 16/2/2008 14:52

They no longer have the Renault Franchise for Livingston as this goes at the end of Feb, this site performed very well when Vardy's had it, Renault Edinburgh East have also just lost the Reanult Franchise and this also was Vardys before Pendragon purchased, their performance has been terrible since PDG purchased!!

[bmw566] 16/2/2008 12:57

Interesting thanks. I agree with you about Pendragon Senior Management being very experienced, and older. The one I have met, Iain McCandlish, the F&I Director would have been a player in 1973. His counterparts in Inchcape, Steve Archer and Lookers, Paul Bentley are considerably younger and wouldn't have been through really tough times before.

Pendragon do seem to be real penny pinchers, not always looking at the bigger picture. Still that might be what is needed in a recessionary environment. Cut the costs back to the bone, to survive. We shall see.

[kfp] 16/2/2008 11:50

What we don't need know is another profit warning,they say they always come in three's!
What I like about PDG is they management have survived in recession's before some young managers have only known the last 10 years,cheap credit, what other time in history could you buy a house,have 10% back in your pocket and not put anything down?
In my opinion the property correction has'nt even started.
Thats my worry with consumer spending.
I hope I'm wrong.
Keith
Funny enough we had a Labour goverment then,chancellor promised to "sqeeze the rich until the pips squeak" everbody worth having here left,Mr Darling this week was threatend with a mass exodus of the sucessful,and backed down on similar plans.
Goodness knowa where he is going to find the £40 billion shortfall,he cant tax us anymore,,can he?
Funny how history repeats it's self !!

[kfp] 16/2/2008 11:27

In 1973 the pullback was caused by oil quadrupling,could you imagine that today ? £4 a litre !!
Also inflation reached 26 % in 1975 I think,ftse went down 78 % in 1974 but rose 50% in January 1975 alone,something to think about,if you are not in you cant win.

Joe public were selling in 1974 just as the market turned,they always do.
Could be worse than 73 we didnt have so much debt but the banks were shaky as now and wouldnt lend,only to people that didnt need it.
I had a garage,which I sold in 2005 for flats,with 20 people workin for me and 35 hire cars .
Boy did I have some ration books !!
Regards
Keith

[bmw566] 16/2/2008 10:24

50p a share would be nice. Here's hoping. Do you think it will pan out like 1973 Kfp? Are there striking similarities.

[kfp] 16/2/2008 09:40

If the coming slowdown is anything like 1973,when we all got issued pettrol coupons and mechanics (as they were called then) worked with lights connected to car battery !
Then there will be plenty of people who will be willing to work for £11000 per year .
IMHO company willb taken out by Inchcape or money from abroad ... 50p per share ?
Just my thoughts..

[bmw566] 16/2/2008 08:01

Pendragon do not appear to treat their staff well. Just an observation from comments on various bulletin boards. Without exception, it seems, skilled, innovative, achieving staff (well paid), are being replaced by cheap, yes men.

I've observed this in a number of industries and it doesn't work out over the long term. I believe this is one of the reasons the banks are in such a mess at the moment. Anybody intelligent enough, who has been with the company long enough to understand the complexities of risk, aged computer systems and products, starts to look expensive to the accountants and is laid off, or walks.

The £11,000 pa staff left often haven't got a clue what they are doing and don't care because they are treated like numbskulls, with surviving manager's left supervising 100's of people for peanuts. Invariably millions of pounds are lost through ignorance and the future of the company destroyed, because the innovators and leaders have moved on........SAD!!

[regvardy999] 15/2/2008 22:56

hi

i have worked for vardys/pendragon for 7 years and this is the worst i have ever known it.

When pdg took vardy over they did not have a renault franchise, all the renault sites were vardy sites, same for VW. The 5 vw site were sold off. Now strange things are happening to Renault sites, 1 site is closing and rotherham renault is laying off new car sales leader, commercial sales, vehicle progressor, administrator. Rumour is renault dont like pdg. Maybe they are going to withdraw the franchises.


Morale is at an all time low, staff are leaving in droves, new managers who come from outside the group are not hanging around. People who have worked for many years with vardys are leaving, including myself.


The excuse for Evanshalshaw Direct at Houghton House being closed is they can no longer buy cars in bulk purchases any cheaper than a salesleader can go out and buy the same vechicle as a single purchase, this was the excuse sent by trveor finn onto teh internal intranet.

The subprime department at Houghton House is known as CFU (central finance unit), this closure is a massive mistake and will cost the company millions. Currnetly all deals that fail at dealership level get faxed to CFU who then work hard to get them passed with the like of Welcome etc. A few years ago we did it a dealer level but its complicated as when dealing with subprime the rates, terms and conditions vary widley and most business managers cant work the deals out and those that can cant be bothered because its time consuming from proposal stage to payout stage. Vardys set up the department with Mike Burn (ex Yes Car Credit) who ahd a team of around 20 who specialised in this area. Once a customer was accepted the deal was passed back to the dealership and it counted in the monthly figures.

This little department accepted around 500 deals a month at around £800 a deal/unit.

Rumour is subprime is going back to the control of the dealerships, who wont process and control it as well as the pros who have just lost their jobs.

Timberrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr!!!!!!!!!

[chalkya] 14/2/2008 14:55

vertu motors just gone up 20% 6p

[bmw566] 14/2/2008 12:31

Unsettling times regvardy999. Cost cutting beginning in earnest. Hope you're OK.

Car Buyers Feeling Credit Pinch

Advertising


The credit crunch is hitting car buying, with planned purchases plummeting to their lowest point for two years, according to new figures.


News Added: February 14, 2008


The number of people intending to buy a car in the next 12 months has fallen from 25% a year ago to 20% now, a poll by AA Personal Loans found.

And those planning to make a purchase will spend less on their car, the survey of 2,000 people showed.

Six months ago, buyers intended to spend an average of £9,827 on new purchases, but this figure has now come down to £8,851.

Scots intend to make the most purchases over the next 12 months, with 28% planning to buy a car. In contrast, just 17% of people in southern England and 17% in the Midlands and Wales are planning to replace their vehicle.

The survey also showed:

:: The number of people planning to buy second-hand cars under three years old has risen from 36% to 45% in the last six months;

:: The number of men likely to buy a car in the year ahead has fallen by 15% in the last six months, but males planning to buy a used vehicle has gone up from 37% to 48%;

:: The number of women planning to buy a second-hand car has risen from 34% six months ago to 42%;

:: 43% of over-55s are planning a new purchase, compared with just 13% of 25 to 34-year-olds.

AA Personal Loans head Mark Huggins said: "Faced with rising costs including fuel - for example, the cost of unleaded petrol is now 102.8p per litre compared with 87.5p this time last year - car buyers seem to be shopping around for a more economical way of buying a reliable car.

"A third of buyers finance their car purchase with a loan, so it's important they shop around for the best loan rate, too."

[regvardy999] 14/2/2008 12:22

hi

just to let you know, about an hour ago tehy have issued Houghton House head office staff with redundancy.

Apparently the only departments to be save are vardy contatc motoring and Autoprotect.

CFU, central finance unit which gets subprime people through finance for each dealership is gone too, this department sells 500+ cars a month. Cant see why they would close it!!

also things happening with Renault franchise

i'll keep you posted.

[lamanga2004] 13/2/2008 17:24

.
Bloody internal server error? Well it certainly posted the same thing 4 times....

[lamanga2004] 13/2/2008 17:24

The above snippets taken from news aggregated by TDWaterhouse Protrader:

"Date/Time" "Headline" "Src"

"08-Feb-2008 15:28:00" "Pendragon PLC - Holding(s) in Company " "REG"

"06-Feb-2008 15:10:00" "London shares - midafternoon features " "EUR"

"06-Feb-2008 14:55:00" "London shares - midafternoon features " "AFX"

"06-Feb-2008 08:59:00" "UK smallcap opening - Alexon rally after Style Menswear sale " "EUR"

"06-Feb-2008 08:43:00" "UK smallcap opening - Alexon rally after Style Menswear sale " "AFX"

"01-Feb-2008 15:24:00" "Pendragon PLC - Holding(s) in Company " "REG"

[lamanga2004] 13/2/2008 17:22

That news is one week old.

Feb 6th - EUR
LONDON (Thomson Financial) - Alexon staged a much-needed rally, rebounding 5-3/4 pence to 75 as traders expressed relief that the fashion group has finally rid itself of Style Menswear, a struggling clothing chain that yesterday went to retail entrepreneur John Kinnaird for a token sum of 1 stg. Analysts reckon Alexon, shorn of Style, may soon be the subject of an opportunistic approach.

Elsewhere, Pendragon edged up 3/4 to 31, with punters taking the view that the motor dealer could face a bid approach.

Feb 6th - AFX
Pendragon 33-1/4 up 3
Bid speculation

[zimzoot] 13/2/2008 15:03

Pendragon's share price rallies



Share value accelerates amid bid speculation

Pendragon shares have rallied amid industry speculation that the UK's largest car dealer could be the subject of a takeover bid.

Its share price accelerated 3.75p yesterday to 36.25p as rumours of a bid approach persist.

Reports in the financial press suggest rival Inchcape and Lex Services have been touted as potential suitors.

In November last year Pendragon announced it would miss its 2007 operating profit by £12m.

The giant dealer group, which has a turnover of more than £5bn, also reduced profit expectations for 2008 by £18m.

It blamed a weaker used car market in the UK and sluggish US sales, brought about by the south Californian fires, for the poor trading update.