The results are ok but the pension liability is a problem. I know that it may sort its self out if interest rates improve, but can't see this happening to any large degree short term or medium term. Haven't looked at the detail but they look ok.
The company has achieved great results and in fact has exceeded expectations. It should probably start to rise as of tomorrow, the current decrease is probably due to the current broker rating which should be ignored as 'Stalin' mentioned also.
Hottips the thing that worries me about the dragon and pre reg is the volume they do just to hit the numbers taking to much VB to profit and not standing the car or vans right if they don't sell them quick they are very soon out of bed. From personal experience the bod walk around with one eye shut. Parts is another area that worries me how much obsolescent stock is building up just to hit todays purchase targets. Today's profit tomorrow's loss? 46p is miles away 34p is more realistic if they are counting the beans correctly. Big if.....
I think you are right Stalin123,given the small margins that exist particularly in the used car side of their business and the absolute need for volume growth it looks a huge risk to me. If you look at the reported volumes from the other major players, Marshalls, lookers, Inchcape, Vertu etc they have all focussed heavily on used cars this year with significant gains. Without sounding too pessimistic I cannot see the used car market continuing to grow and therefore the competition will become much more fierce for Pendragon during the next 12 months . We all see the press reports around high concentrations of nearly new /pre reg. cars which are being sold at low to no margin and Pendragon must be much more exposed to this than it has been in the recent past. I note today, that in the motor trade press, Pendragon are on a major recruitment drive for technicians and it may well be a signal that they are having to focus very quickly on alternative profit streams to prop up their used car business. Add this to the loss of a number of senior operations people,( you only have to log on to their vacancies web page to see how many people they need to replace !!) and I think the brokers are more than optimistic . I hope they get to 46p as along term investor but I suspect I will be disappointed again, 34p looks optimistic... !
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