The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
IS indeed being weighed down by 2 things... Continued concern on Brexit Continued concern that the market has topped out. Take a look over the actual sector...Inchcape, Lookers, PDG, Vertu, they are all being effected by the above. Here is where the dissapointment lies for me with PDG. Used GP only up 4.2% and onyl 1.2% in aftersales GP... Q1 has proved to be very good for a few motor groups, these numbers from PDG seem appear to be half of what they should be. Equaly, with volumes up for other groups, that is a very good spot hottips on actual used volumes, again some groups have had a very very good Q1 and even Q2 has started not too bad at all....Looks like PDG are not getting there share of this. I have found it very bizarre that PDG hasve continued to sell out of the premium franchises, none more so than landrover. Given the price other groups have been paying to buy these, perhaps Mr Finn feels hes been cashing these out at the top of the market.....still looks to me like the most sought after vehicle is indeed a landrover....So I do beleive that it has been misjudged at which point these dealerships have been sold. It almost feels like after being bitten paying over the odds at the hight of the market that PDG has retreated into its shell...Perhaps too much fear still exsists after all most going to the wall. "with our debt : underlying EBITDA ratio remaining significantly below our target range of 1.0 to 1.5. We are currently assessing our best use of funds" Finally PDG have gotten the issue of debt undercontrol, a hell of a lot better terms than when the market crashed....yet...still....scared to spend the money...and when they do, things arent turning out as planned. My biggest issue with PDG, apart from certain "senior" management (and regardless what you think of Trevor, he is actually a very smart man who is well resepected in the industry, something that cant be said for some of the "others", here, is simple.....Shares in CIRC... 1.5bn shares in circ. What should have happened a few years back was a consolodation, bring this back down to the 500m shares in circ. 1.5BN shares....takes alot to move this in order to get the returns you think you should get. The sector is very tetchy SP wise at the moment because of the 2 mentioned items, once Brexit or non Brexit is out of the way, the sector will recover some traction. The second of the two , has the sector topped out, I dont beleive it has just yet. New cars Id agree, used cars, well, just keep your eyes open accross the sector, it is still buyont and there are groups taking more than there fair share at more than a decent margin. Equally, service plan pentertation is starting to kick in on a few groups as well, so expect to see encouraging results in terms of aftersales gp and bottom line. Just my tuppence :)
A reasonably up-beat statement and it does mention profitability increase on used car sales. We have to accept that this year was sign-posted as a relatively flat year for car sales. Needless to say, negative reaction so far from the Market, although to be fair the gereneral stockmarket is not in a positive mood. .I will be comforted by the dividend next month, but otherwise nursing another painful month with the capital value of my holding. Something has to give soon with the MCap below£500M. Best Wishes
http://www.investegate.co.uk/pendragon-plc/pdg/interim-management-statement/201604280700085812W/?fe=1&utm_source=FE%20Investegate%20Alerts&utm_medium=Email&utm_content=Announcement%20Alert%20Mail&utm_campaign=Pendragon%20PLC%20Alert Take a look through the trading update, any mention of volumes particularly in used cars is missing. this would suggest volumes are at best static and this is after opening new supermarkets ! I believed used car volume growth was the cornerstone of the latest strategy, why would you not comment?? visitors to the website is meaningless unless volumes go up with it !
Again, absolutely spot on. I originally thought, with Trevor Finn, we had a maestro (not Austin!) at the helm. But your comments would appear potentially accurate given the lack of "magic" coming from him and the Board. Trouble is this site re Pendragon is relatively dormant. With my other shares, one of which you can e-mail the MD and get a same day reply!!! Worrying as near 52 week low, I believe touched this morning. I appreciate the sector is under a bit of a cloud, but at £500M this would be a snip for a break up specialist. I am happy to work with you hottips to try and get some kind of communication from the Board although the AGM notes should be digested first. Best Wishes.
The chief executive, Trevor Finn, obviously agreed with your "happiness" at 49p, he sold 4.5m !!!..... before the price tumbled and will now , once again, be granted more shares at the lower price as an "incentive" no doubt . It is time we all woke up !
I was "happy" when the share price hit 49p in January, perceiving that the market was re-rating this share and why not? Good profits/Debt lowered/Increasing dividends. I can't get to the AGM as I live in Kent and my shares (200000plus) are within my SIPP. I retain the feeling that with a MCap of around £500M, there must surely come at time when someone gets interested. I know Odey is involved (I think), but I think Jack Peachey sold his holding. I don't really know. However this cannot go on for much longer. Nevertheless Inch and Look also suffering. Best Wishes.
Same here, I have been in for a long time and it consistently fails to make progress,which is why I am watching closely. The most annoying thing is the top level remuneration constantly being approved with diabolical performance in market price/cap and investor returns that are way below average over the last 5 years. I see little to convince me that this will improve any time soon. I am surprised the big boys are not pushing for changes in leadership. I cannot find out who is specifically heading investor relations which probably means there is not anyone directly(telling in itself) but the Chairman in Melvyn Egglenton (yes he is the guy who was a partner at KPMG, Pendragon auditors at the same time as being a non exec !! KPMG heavily fined last year !!) and the Chief Operating officer is called Martin Casha
Excellent work by you with this information. Clearly this is a worry. If you are going to sport the title" UK's biggest car dealer" then you need to have the dynamics to do it, rather than a Arthur Daley approach. I would suggest someone ascertains the key person in Investor Relations at Pendragon to tell us what is going on. I am happy to find names, but I am not well versed in the industry speak, as your contact might be. I am just another "poor bugger" who invested at 80p!!!
http://www.am-online.com/news/car-manufacturer-news/2016/04/18/jaguar-dealers-to-turn-corner-after-tough-2015-says-uk-md It mystifies me why the company would sell these LandRover businesses, 7 or 8 in the last 30 months?? at £1.4m profit each??. I see your point on used cars Pageyboy55 but you would need to sell a LOT more used cars to cover the lost opportunity from LandRover, anyone got a view? AGM this Thursday, it would be a question to ask?
I have picked up from a big dealer today that Pendragon has closed its Birmingham Aston Martin Dealership with 14 days notice to the staff ! having lost the territory to Cambia group. It has also announced the loss of its Wolverhampton Jaguar territory to Jardine group and my source says it has agreed to sell its lucrative north London Woodford JLR dealer also to Cambria. Apparently it has let go of its head of business for its 6 month old flagship standalone used car site in central Birmingham for poor performance and temporarily shut the doors of its newly opened stand alone used car site in Slough. All this after losing key senior management over the last 6 months. No wonder the price is where it is , I suspect the institutions are watching closely , it appears Pendragon are continuing to shed premium businesses . The next trading update will be critical. The annual results did not look great for its Stratstone division. Any thoughts?
Fair point Pete. But accepting the Stockmarket had a rocky start to the year, we are back up to 6400.FTSE Index. Meantime Pendragon is down circa 35% in just over 3 months. Dealer margins may be being squeezed but why such a huge drop in market capitalisation for a business that has steadied itself in recent years? Plus major concentration and TV advertising for Evans Halshaw for the buying & selling of second hand cars were margins are thicker. Regards Brian
Dealer's margins are being squeezed of late, it is a common theme described in Automotive Mgt magazine, I think that this is one of the factors at play here. I've had this on my watch list for a while, but the margin issue has been putting me off.
Nearing 52 week low, although again (it appears) more buyers than sellers.
At the time of writing this, the shares are down 5% despite the fact that it appears there are more buyers than sellers. It never seems worthwhile waiting for the dividend ie ex div date being this Friday, as the shares always seem to take a bashing. Little upside movement beyond 37pence, which suggest an awfully long wait before we see this share on a bull run. I remain mystified given the sentiment toward car buying, cheap petrol and the recent outstanding figures from this business.
Here we go again. Terrible 3 months performance since 49pence. I continue to believe this share must enjoy a re-rating soon and I always maintain a glimmer of hope that this would be an ideal break-up situation in a highly fragmented dealer sector. Mathsprof are you still out there?
Starting to edge up higher as the div approaches.
Positive that the Chief Exec hasn't sold his LTIP shares just awarded,
PDG are as well represented in the north as any other main dealer group. It's the south where the company historically doesn't have any noticeable presence which they are addressing by seeking new sites and converting existing Quicko sites (Borehamwood, being one) into used car sites.
starting to look weak compared to competitors especially in the north, Lookers and Arnold Clark are expanding rapidly
Hi Hotlips, I'm far from an expert in this share, it just seemed to have a lot of value when I bought in at 33p ish. The fall that had occured previously did not seem to happen on the back of any specific news. It could have been that the share price at 45p was slightly inflated and so there was a bit of an over correction. But for me the bottom line is everything, are they making money? Yes What is the yeild? 3.61% What is the risk? No immediate risks and even from things like oil or brexit that I can see. You can get better yeilds if you look around but I'd be happy to hold here for a while longer. Target is probably 40-41p for me, then set a stop loss.
Your prediction "bewareshadows" was right. Looks like none of the big boys have any interest. I Noticed today that VERTU have bought a big Mercedes business, it looks exciting for them. There are obviously earnings enhancing businesses out there to buy, Pendragon have been a seller for many years now. I wonder if they are not being given the opportunity by the car manufacturers? does anyone have a view? They are certainly much smaller than they were particularly with the premium brands looking at their annual reports for previous years.
6% up on the day, no doubt it will bob around this for a while.
Just had a run through the numbers 458. My concern would be the performance in the premium Stratstone business. I note it lost its MD early last year and if you look at aftersales and particularly used car results they look very weak for the second half compared with the interim results. The report says that aftersales shows improvements on a like for like basis, but that plays to 458 s earlier posting about the apparent reduction in outlets, which is concerning. The strategy is clear from the report in that they are going for huge growth in used cars but it is hard to see the results for stand alone used car outlets, now that they have merged the big loss making Quicks dealers,( which appear from the web site to still be open) , in to the Evans Halshaw numbers. It seems to me they have a lot of work to do on premium used car sales to stabilise that first. I also worry about the dominance of BCAmarketplace PLc in terms of their monopoly on used car supply.In order to grow rapidly Pendragon will need to secure much more supply of used cars to sell on. I also note from todays statement, that the senior independent Director and chairman of the audit committee has resigned and is leaving quickly . Given the issues with governance and the independence of the Chairman (KPMG link on previous posting) that were raised last year, probably no surprise. I still worry about the general sentiment towards the stock 458, it is only undervalued if someone is prepared to buy in .
Up a few percentage points returning to a more even level.
Many thanks 458