19 Oct 2018 07:00
PENDRAGON PLC TRADING UPDATE (ISSUED 19 October 2018)
The introduction of Worldwide Harmonised Light Vehicle Test Procedure ("WLTP") has created disruption in new car sales and uncertainty over new vehicle supply. UK New Car market data for the month of September showed a decline of 20% in new car registrations and a similar trend has continued in October demonstrating the impact of WLTP.
This has caused significant new vehicle supply disruption which gives us cause for concern over the coming months for new vehicle sales and profitability. This will clearly have an effect on the Group.
During the year we have continued to invest in our Used Car business in new start up locations and transformation costs. As announced at the half year we commenced the roll out of our "used car factories" for the refurbishment of used inventory. This accelerated investment is being made in spite of the short term dilutive effect and the significant costs incurred, latest data gives us encouragement for the future growth of this part of the business.
As a result of the combination of these factors our underlying profit before tax for 2018 is expected to be £50m.
Pendragon will publish our Q3 Interim Management Statement on 26 October 2018
Enquiries |
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Trevor Finn | Chief Executive | Pendragon PLC | 01623 725114 |
Tim Holden | Finance Director | Pendragon PLC | 01623 725114 |
Gordon Simpson | Partner | Finsbury | 0207 2513801 |
Philip Walters | Managing Director | Finsbury | 0207 2513801 |
Notes to editors
Impact of Worldwide Harmonised Light Vehicle Test Procedure ("WLTP")
WLTP became effective on 1 September 2018. This new testing regime has resulted in disruption in vehicle supply with, in some cases, oversupply of vehicles which are not desirable and undersupply of desirable vehicles.
Explanation of WLTP (Source: SMMT)
From 1 September, all cars sold in the EU have to undergo a new test called the Worldwide Harmonised Light Vehicle Test Procedure (WLTP). The test measures all regulated emissions, as well as CO2 and fuel economy. Like the old test it replaces, it is conducted in controlled laboratory conditions for consistency across every test and every new vehicle in every country. However, it is conducted at faster speeds, over a longer distance and is more dynamic, with a greater range of vehicle and engine speeds, engine load, gear changes and temperatures, while also taking into account modern vehicle technology. And, because it is based upon some half a million miles of real driving data, it is far closer to the conditions most people experience on the road today.
In addition, new cars will also need to prove their air quality credentials 'on the road' by passing the new Real Driving Emissions (RDE) test. This rigorous test, which takes around four days to complete, is supplementary to WLTP and uses specially calibrated state-of-the-art portable emissions measurement (PEMS) equipment. This very sensitive equipment analyses the trace tailpipe emissions of pollutants while the car is driven in a wide range of both every-day and extreme conditions, from stop-start inner-city, to open road driving, and even at rarely, if ever, encountered speeds of 100mph and altitudes equivalent to Ben Nevis.