Pendragon leaps 12pc as used cars drive sales
A BULLISH update saw Pendragon shares soar as the car retailer revealed it would focus on used vehicle sales to drive the business forward.
Pendragon is aiming for doubledigit revenue growth from used cars over the five years to 2021, while it looks to reduce its premium franchise locations in the UK and dispose of its US business.
Overall revenue climbed 4.5pc to £4.7bn in 2017, with used car sales up 15.3pc. New vehicle revenue dipped 4.9pc in a year which saw new car registrations across the UK fall by 8pc for the brands Pendragon sells. Leasing saw the greatest gains, with revenues up 39pc and profits up to £4.8m. But overall pre-tax profit for the year fell 10.5pc to £65.3m.
Yet chief executive Trevor Finn was upbeat in the face of challenging markets, as consumer confidence dips amid rising inflation and interest rate hikes. He reassured the market that performance for the coming year would be in line with expectations. Shares accelerated 11.7pc, or 2.45p, to 23.35p. The
FTSE 100 closed down fractionally by 0.13pc, or 9.05 points to 7168.01. On Wall Street, the Dow Jones
Industrial Average rose 0.16pc, or 39.18 points, to 24,640.45. At a swearing in ceremony yesterday, new Federal Reserve chairman Jerome Powell said the central bank was keeping a close eye on threats to financial stability in the wake of last week’s market rout. ‘We will remain alert to any developing risks,’ said Powell, whose first day in office coincided with the biggest points fall in Wall Street history.
A strengthening pound – up 0.5pc to $1.39 – might be good for those booking their summer holidays, but it’s causing some concern about the three-quarters of Footsie earnings which come from overseas. Citigroup cut its target price for
Imperial Brands to 2850p because of foreign exchange rate concerns and fears that sales will remain weaker until next year.
Shares in the tobacco firm dipped 2.3pc, or 61p, to 2600.5p.
Two contract wins helped to boost Craneware shares. The firm specialises in computer software for the US healthcare industry. A contract with a blue-chip healthcare provider will see its products used across 20 hospitals and is expected to generate £3.6m in revenue, while a second deal will deliver a further £2.5m. Shares surged 4.5pc, or 72.5p, to 1670p.
Intercede also leapt after securing a contract. It has signed a £1m deal for the use of its MyID software program for use in an undisclosed Middle Eastern country. Using the software, citizens with a national identity card will be able to generate a new government digital identity through an app on their smartphone. Intercede said it would enhance efficiency and security. Shares climbed 9.3pc, or 2.5p, to 29.5p. Meanwhile, Smart Metering Systems has signed an agreement with Utilita Energy which could see it provide more than 100,000 meters to homes through 2018.
SMS will provide domestic smart energy meters as part of the Government’s programme which requires energy suppliers to fit their customers with a smart meter in homes and small businesses by 2020. Shares gained 2.6pc, or 18p, to 710p. The chief executive and chief strategy officer at Learning Technologies have each offloaded 3m shares in the business. Sold at a price of 75p a share, Jonathan Satchell and Piers Lea have each pocketed £2.25m. They retain stakes of 17.4pc and 2.3pc respectively in the e-learning services business. Shares dropped 4.5pc, or 3.4p, to 71.6p.
UP Global Sourcing shares partially recovered after the previous day’s plunge. Up 12.5pc, or 4p, to 36p, they still have a lot of ground to recapture to get back to the 60p they opened at last Wednesday.