Pendragon says Brexit uncertainty to exacerbate full-year loss

Pendragon share price H1 2019

Pendragon share price H1 2019

"There has been a material decline in the group's profitability principally as a result of the actions taken to address excess used auto stock", he added.

Chambers said: "I am firmly of the view that the company now needs an executive chairman who can dedicate the time and industry expertise that the company requires in these hard markets". The group would not comment.

In its outlook, the company said: "Economic and market conditions are very challenging".

The troubled motor group, which made £21m profit in the same period past year, said it would be axeing 22 of its 34 Car Stores and one of its three preparation centres.

H1 financial results today showed that the group had achieved a 0.8% decline in turnover, to £2.46bn (2018: £2.47bn) during the first half of 2019, but a 2.9% increase on a like-for-like basis.

Vehicle dealer Pendragon said on Wednesday that it swung to a loss in the first half in "challenging" markets as it scrapped its dividend, sounded a downbeat note on the outlook and announced the loss of around 300 jobs.

During the reported period Pendragon also announced the sale of two of its franchise locations in the United States as it continues its plan to withdraw from the overseas market. The group also said it was scrapping its interim dividend.

The overstocking led to a pile up of unsold used vehicles, which the group sought to address in the second quarter through cutting prices and selling down stock through auction, triggering "significant losses in the period", which Pendragon said was "exacerbated by market-driven reduction in used auto values". 'This outcome still reflects a meaningful recovery in profitability during the second half based upon self-help actions that the business is taking as well as the assumption that current market conditions do not deteriorate further'.

Non-executive chairman Chris Chambers, who - it was also announced today - will step down on October 1, said: "Whilst market conditions have been challenging in the first half of 2019 with headwinds in both the used and new auto markets, the group has continued to deliver like-for-like revenue growth". Bill Berman, who joined Pendragon as a non-exec director in April will become executive chairman and lead the search for a new chief executive to replace Mark Herbert who left the company three months after he started in April.

Before joining Pendragon Mr Berman has an extensive career at AutoNation, the largest automotive retailer in America, where he served as president and chief operating officer. Pendragon is still searching for long-term leadership to preside over the strategic direction, with the company now looking for a long-term non-exec chairman and continuing the search for a CEO and an MD for the Car Store business.