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New CEO of Pendragon "‘We never really had a used car strategy before other than we wanted to sell a lot of used cars,’ he said.
‘That’s not a strategy – that’s wishful thinking.
‘If you really want to be transformative and cut a change in a market or disrupt it you need a well laid out plan – and I think we’ve got that.
‘When we go to market we’ll be out there talking about how we’re different to everyone else. Not let’s go put 20 cars into an ex-Vauxhall store that got shut down two years ago and has the cost structure that is supported by a new car franchise.
‘That doesn’t make sense. That’s not a strategy.’
Motivated,creative,focused and experienced leadership who value and support their colleagues funnily enough produces positive and incredible results....Verrtu Motors has delivered an adjusted profit before tax of £7.4 million in July after post-lockdown trading has been “significantly stronger than envisaged lessons should be learned at the Dragon....imho
Mark Herbert Resigned....Chris Chambers is no longer with the company also resigned... as you know new Non Execs have to demonstrate belief on buying in which explains the other buys.....I am talking about the CEO,COO and other ex executive directors...no buy in as I see?
Do not see any Director buys for some considerable time....Given its the same senior Management which has been in place for years...it appears are they not confident they know what to do...1800 redundancies...none at senior level...I would have thought the New CEO (as a true outsider) could see the problem lies with the Senior Management. Get New blood in there!
Not dissimilar business model....Lets see if The Dragons Management can do it?
A strong performance from its used car business helped Arnold Clark deliver pre-tax profits up 6.5% to £113.5m on turnover up 7.8% to £4.3bn in 2018.
The group saw used car sales volumes rise 9.5% to 238,977 units while new car sales – hit by WLTP – fell -2.6% to 68,344 units.
“Overall growth in revenue of 7.8% was primarily driven by used cars. Used vehicle supply has been strengthened considerably through investment in our Arnold Buys Your Car brand, which provides an efficient and reliable digital route to individuals to sell their used car,” said Arnold Clark CEO Eddie Hawthorne (pictured) in results filed at Companies House this week.
Arnold Clark has also invested heavily in its Motorstore used car centres, opening four centres in 2017 and one in 2018.
In February this year it opened a Motorstore in Bolton and plans two more in the latter half of the year.
In October it opened a dedicated preparation centre for used cars in Ayr, which will be rolled out to other centres.
“We invest significant resources into bringing newly acquired used vehicles up to the high quality standard we require before displaying for retail sale.
“As part of our ongoing drive for operational efficiency we have piloted a new process for this and in October opened a dedicated preparation centre in Ayr to provide this service to our branches in the area. This solution will be rolled out to other suitable locations throughout the group in in due course,” said Hawthorne.
During the year the company rebranded its sales force to Product Consultants and introduced a five-day working week for them.
It also expanded through acquisitions,
So Vertu and Sytner deliver solid results.....Mmmm maybe just Maybe it's the Management team here at the Dragon...Maybe it will improve when board Members stop resigning and when they get a CEO? Just sayin
THE headlines made for uncomfortable reading at Pendragon HQ. Chief executive Mark Herbert had ‘driven off into the sunset’ just three months after taking charge of the listed dealership group.
The puns in the papers were plentiful, but they wouldn’t have softened the blow.
Exactly why the new man left the business so early into his tenure is still unclear. Reports suggest it was a brutal disagreement on how to turn the company around, but no one apart from those inside the boardroom knows for sure.
Pendragon operates the Evans Halshaw, Stratstone and Car Store brands and is heavily invested in a used car strategy with Car Store, but Herbert was a new car man. The talk is that a disagreement on strategy between Herbert and Pendragon’s chairman led to an irreversible clash.
To make matters worse, Herbert’s departure was a blow that came just a few weeks after Pendragon issued a profit warning. The statement said Pendragon was set to return to profit in its second half, but dire half-year trading had put it on course for a small annual loss.
Doesn’t make for pretty reading does it? I spoke to Mike Allen, head of research at Zeus Capital, about how to fix a problem like Pendragon and in a frank phone call he told me the business needed a radical ‘culture change’ and desperately needed to improve its OEM relationships.
‘The used car strategy is not working, but they seem to want to stick with it,’ said Allen.
‘The question is really “just how big should a dealer group be?” Pendragon arguably got too big after 2007, struggled with a series of big acquisitions and failed to integrate them properly. They over-expanded, damaged relationships and are living with that pain. They need a shake-up of the management team.’
Some rival dealer bosses I’ve spoken to think time could ultimately be up for Pendragon.
One cited huge wage bills the firm had been saddled with for its senior team which had strangled it.
Another added it had all but used up the £300m it raised in a sale and lease-back deal of its property in 2007 – constructed then to raise funds after the crippling purchase of Reg Vardy for £504m.
Mike Jones, chairman of accountancy group ASE, thinks it’ll be a tough problem to fix, but not impossible. ‘It needs a team at the top, not just one person, who can lead a strategy of change,’ he said. ‘Pendragon needs a special person, one who can build a team around them.
‘Ultimately the car business is about people and without good people it struggles.’
So are Pendragon’s issues endemic of an industry in peril or is there light at the end of the tunnel? Well, that depends on who you speak to. My contacts have mixed views. Some dealer chiefs are telling me that quarter two has fallen off a cliff. New car sales have plummeted, used car sales are tougher than ever, and as the summer hots up, so too does the heat under dealership bosses.
Elsewhere, the wider industry paints a muddy picture. In what weathermen would descr
Pendragon’s Evans Halshaw used car business and Arnold Clark have been accused of selling insurance write-offs without telling buyers the vehicles had been damaged in a crash following an investigation by the BBC.
The news corporation’s Rip Off Britain television programme will screen the findings on BBC One this evening (May 7), claiming that it identified 70 such vehicles during its investigations into the AM100 used car retail operations.
The consumer programme said that the situation could mean that buyers are paying "thousands of pounds" more for the cars than they are actually worth.
A statement issued by the BBC ahead of the screening of tonight’s episode of Rip Off Britain, said: “Sales staff at the UK's largest used car retailer, Evans Halshaw, and two other big name chains, Arnold Clark and Car Store, told undercover reporters from the BBC's Rip Off Britain that they were selling cars that had never been written-off, when in fact, thanks to serious damage from major collisions, they had indeed been written-off by insurance companies.
“This could mean buyers are paying thousands of pounds more for the cars than they are really worth.
“Rip Off Britain's undercover reporters identified a number of insurance write-off vehicles that had been for sale at salvage auctions just months earlier with extensive damage, which then appeared on the forecourts of car dealerships fully repaired and with no sign of their flawed history.”
Evans Halshaw and Carstore told the BBC that they had no idea that the cars had been written off and blamed the data systems they relied on to check a vehicle's background.
Arnold Clark, meanwhile, said it believed it had done all the checks it could with the information available.
Rip Off Britain also spoke to AutoExpress journalist Hugo Griffiths who says that he's not surprised that the dealerships may be unaware of the history of some of the vehicles they sell.
He said that he has uncovered significant gaps in the official database used by consumers and dealerships to check second hand cars' history and estimated that 80,000 write offs a year (around 12% of the total for sale) could be repaired and put back on the road, with new owners having no idea of their car's chequered past.
The BBC said that Rip Off Britain had visited the big name car dealerships in March 2019 with forensic car expert John Dabek.
He examined the vehicles that the programme had identified as write offs and spotted a series of tell-tale signs of the cars' past, adding that he was surprised that given the extent of the repairs he came across, there were no concerns raised by whoever assessed the cars at the companies before they ended up on sale.
His concerns focussed not primarily on the safety of the vehicles for sale, but whether, considering their history, they are worth the price they are being sold for.
The full story can be seen in the second episode of the new series of BBC One's Rip Off Britain at
Pendragon Car Store boss Chris Caygill 'on gardening leave’
MARSHALLS GROUP
Despite market declines in the new and used car market I am delighted to announce record 2018 results today.
• LFL revenue up 1.2% to £2.1BN
• GP remained strong at 11.7%
• Record PBT of £25.7m our 4th successive record year since IPO
• LFL new car revenue down 4.5%
• LFL used car revenue up 8.1% with margin up 32bps
• LFL aftersales revenue up 2.3%
• Great Place to Work status 9 years running, ranked 21st
• Strong balance sheet with net assets of £200.4m (£2.57 per share), underpinned by £125.3m of freehold / long leasehold property, minimal debt at £5.1m (0.12x leverage), £120m RCF
• Strong operational cash generation supporting further capital investment of £23.8m
• 33.4% increase in full year dividend to 8.54p per share
Thank you to everyone at Marshall for their hard work in delivering this performance, particularly in what is a challenging market. Let’s make it 5 in a row since IPO and 11 in a row since 2008!
https://www.am-online.com/news/latest-news/2019/02/04/the-results-of-the-2019-am-awards