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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... !
After being told of the sudden closure of Birmingham Aston Martin, I am now told that the Wolverhampton territory for Jaguar and Landrover that Pendragon were publicly in dispute with their former Stratstone MD over, has been lost and transfers on Friday this week to Jardine motor group. Yet another JLR territory? I am not sure where the profit will come from to replace all of these ?.
I understand from a friend at Sytner group that this car is contracted NOT to be sold for 5 years ! So £1.2m of shareholders funds tied up for that period. Certainly looks like vanity, It is hard to see the business case
I was passed this on Saturday , it is an e mail from ASTON MARTIN confirming the termination of Stratstone for the Birmingham territory. BELOW; Dear J Lucke In the following weeks we will be opening a new Aston Martin dealership in Birmingham which will be based at a well-appointed temporary location before moving to a purpose built facility at a later date. We have been working closely with the team at Aston Martin Birmingham to create both a showroom and a customer experience befitting of the Aston Martin brand, with first class customer service delivered by a truly dedicated and passionate team. The dealership will be managed by our experienced partner Grange Motors, who currently run Aston Martin dealerships in Brentwood and Welwyn Garden City. Aston Martin Hagley will cease trading on the 30th April. From this date Aston Martin Birmingham will serve the needs of customers in Birmingham and the surrounding area. Yours sincerely, Marcus Blake I understand the staff were told only a week before so it did not look planned ! It worries me that there appears to be a continuing reduction in the number of premium outlets, I do not recall ever being informed that this was planned in any annual or interim report?? we should have full disclosure. I totally agree with you reference the risk of opening in unknown areas with no supporting infrastructure. Likewise the biggest challenge they face is obtaining more stock to open these new centres with. I suspect that is proving very tough and the only reason that ( for the first time in a long while) that they have not commented on increasing used car sales (maybe they are not increasing !) Visits to a website which they seem hung up on, is irrelevant if it leads to no more sales. To your other point I am told that the head of Finance and insurance for Stratstone and also the head of aftersales have both departed recently . Does anyone have any further info? I am too heavily invested to just sell out , however , I am concerned whether we are to expect trouble.
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 !
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 !
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
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?
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.
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 .
The chief executive, company secretary and chief operating officer look like they all remain according to the annual report from the time. The chairman was embroiled in some controversy earlier last year too looking at this article http://economia.icaew.com/news/february-2015/kpmg-fined-over-independence-issues
I bought my last Jaguar from Luton, 2 years ago so It could not have been that long. The point is why would you get rid of them to open 20 move me closer sites, would you not do both, 458?
I would not have thought that move me closer retail sites could replace these Jaguar and Landrover outlets?
I have been watching for a while and they have sold or closed, JLR outlets in Milton Keynes, Slough, Luton, Manchester, Bolton, Hull, Aberdeen, Perth, Edinburgh, Birmingham and Plymouth in the recent past all of which have been in the trade press . Every other retailer is making a big thing about buying in to JLR and paying big premiums,.