Profit warning puts the brakes on at Pendragon
A CAR-CRASH update from vehicle retailer Pendragon has caused its shares to hit the skids.
The Evans Halshaw owner warned that it was likely to swing to a loss in 2019.
As well as being battered by an industry-wide decline in the sales of both new and used cars, Pendragon said it has ended up with far too many second-hand motors that it needs to offload cheaply.
The firm added that its aftersales business, which covers the maintenance and repairs of cars, is under pressure from rising costs.
Pendragon is now being led by a new management team – Mark Herbert joined as boss at the start of April and Mark Willis became chief financial officer a week later.
Herbert said the expected loss was disappointing, but added: ‘I am confident there are real opportunities for self-help that will improve the performance of the core UK motor and leasing businesses.’ Investors were less convinced, as shares plummeted by 20.9pc or 4.8p to 18.2p.
Amigo Holdings, which lends to customers with a poor credit history, was looking a little shaky itself. Its major shareholder, Richmond Group, which is controlled by the company’s founder James Benamor, announced it had been looking to flog part of its 61.4pc stake. It decided not to proceed with the sale, but said it was still considering selling some shares.
Worries that the market could soon become flooded with Amigo shares, which would push down their price, caused the company to slide 5.5pc, or 16p, to 276p.
Investors are also wary of chatter in the City speculating that billionaire Benamor, who stepped down from Amigo’s board last September just months after the company listed on the stock market, could set up a rival. Cigarette-maker British American Tobacco is cashing in on the increasing popularity of vaping and heated tobacco products.
Bosses at the company behind Benson & Hedges, Lucky Strike and Dunhill said sales from its ecigarette division will rise between 30pc and 50pc this year. But despite the positive noises, shares fell 4.4pc, or 135p, to 2936p.
Chief executive Jack Bowles said: ‘We are creating a stronger, simpler business and driving a step change in new categories, built on the foundation of a strong combustible business.’
He added that traditional cigarettes will help total sales for BAT rise between 3pc and 5pc.
The FTSE 100 slipped back into the red, closing down 0.4pc or 30.83 points at 7367.62, due to renewed jitters over the trade war between the US and China.
US President Trump said he was not interested in a deal with Beijing unless it agreed to some ‘major points’, which prompted China to shoot back that it was ‘not afraid of fighting a trade war’. Doorstep lender Provident
Financial, which last week won its battle to fend off suitor NonStandard Finance, slipped by 6.6pc or 33.1p to 467.3p as a major shareholder headed for the exit.
Investment giant Invesco sold a chunk of shares worth around £2m. The announcement came just a week after Neil Woodford – a former star fund manager at Invesco – was forced to transfer 5 percentage points of his 23.4pc stake to wealth manager St James’s Place after being fired from running its funds.
Sportech, on the other hand, was being snapped up. The betting technology firm climbed 8pc, or 2.3p, to 31p as activist shareholder Harwood Capital and Swiss firm Lombard Odier increased their stakes.
And a contract with children’s TV channel Nickelodeon boosted
Live Company. The events firm will produce themed tours throughout the UK, which sent it shares jumping 6.8pc, or 4.5p, to 71p.