Car dealer Pendragon said that trading had shown a “significant improvement” in July and August after the company posted a smaller loss for the first half of the year.
The London-listed firm said that though the outlook for the rest of the year was uncertain, it was confident that it was “well-positioned” in the long term.
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For the year ended 30 June, Pendragon posted a post-tax loss of £31m, slightly better than last year’s £32.2m effort.
In the first two months of the new financial year, however, it made a profit of £7m, £19m higher than it had recorded for the prior two months.
Across the whole of the first half, revenue dropped 50.4 per cent, falling from £2.45bn to £1.22bn as coronavirus lockdowns restricted trading.
The firm improved its debt position to £46m at the end of June, compared to £104.3m at the same point last year.
Shares in the firm rose 3.1 per cent as markets opened this morning.
Why it’s interesting
Under instructions from the government, car dealerships in the UK closed between 23 March and 1 June due to the coronavirus pandemic, leaving the auto industry reeling.
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According to trade body the Society for Motor Manufacturers and Traders (SMMT), new sales were down 48.5 per cent in the first half of the year.
Pendragon’s sales were just ahead of the industry average, at 47.9 per cent, but the group estimated that it had thus far taken a £44.1m financial hit from the pandemic.
The firm said it used the enforced closures to speed up its digital transformation programme, a key pillar of its plan to return to profit.
By the end of the 2025 financial year, it is targeting annual profit of £85m to £90m.
What Pendragon said
Chief executive Bill Berman said: “We’ve been encouraged by the first few months of trading following reopening and, while the outlook for the remainder of the year remains uncertain, we are confident the operational improvements we have made leave us well-positioned for the long-term.
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“We recently set out our new strategy with digital innovation and operational excellence at its core. Both will be instrumental in transforming Pendragon’s performance and we have made great progress in both areas already this year.
“While there is some distance still to travel, we remain firmly committed to achieving our twin goals of sustainable profit growth and attractive returns for shareholders.”