Pendragon slams into reverse as losses mount

CAR dealer Pendragon, owner of the Evans Halshaw and Stratstone brands, has swung to a loss after costs escalated.

It was hardly the start that chief executive Mark Herbert hoped for after he joined this month.

Although total group revenue was up 1.2pc in the first three months of the year, Pendragon made a loss of £2.8m – a massive £10m below its expectations.

As investors slammed on the brakes, pushing shares down by 9.7pc, or 2.45p, to 22.7p, Herbert, along with new chief financial officer Mark Willis, announced a review of prospects.

Russ Mould, analyst at AJ Bell, said: ‘You know a profit warning is bad when a company launches a review. This indicates a continuing reluctance on the part of UK consumers to splash out on big ticket items, amid economic and political uncertainty, unless prices are cut.’

Pendragon has chosen to prioritise its place as the UK’s biggest car dealer, cutting prices to entice customers rather than watching them slip away.

Its five-year plan to double second-hand car revenue by 2021 now hangs in the balance. Investors must wait until June for more news, when Herbert is due to release the results of his review.

Major supplier Bunzl, which provides businesses around the world with items ranging from disposable coffee cups to safety gear, suffered its worst day of trading in almost 30 years.

Shares dipped 9.3pc, or 237p, to 2314p as it admitted revenue growth rate is slowing, blaming mixed macroeconomic and market conditions, especially in North America, where performance was squeezed by a lack of sales growth and the higher price of goods.

Bunzl, which has historically been keen to expand through buying new businesses, also announced that it had snapped up Netherlands packaging supplier Coolpack. Its performance weighed on the

FTSE 100, although top riser Tui (up 4.5pc, or 37p, to 852.6p) helped to pull the blue-chip index back to end the day up 0.02pc, or 1.40points, at 7471.32.

Meanwhile the FTSE 250 was boosted by private hospitals firm

Mediclinic, after it said that it had met expectations for the year ending March 2019.

Analysts at Morgan Stanley said the business had ‘handled admirably’ the headwinds it had faced in some markets.

The comments came as a pat on the back for new chief executive Ronnie van der Merwe, who has been leading a turnaround of the South African firm. Shares jumped by 7.8pc, or 23.7p, to 327.5p.

GB Group beat expectations with ease, as it announced profits

for the year ending in March would be up 20.6pc to £31.7m.

The credit-scoring and identity-checking business gained significant new customers, and shares rose 14.8pc, or 81p, to 630p.

A new deal for Learning Technologies Group, which offers online workplace learning and recruitment services, caused its shares to leap.

The firm has bought Breezy, a recruitment software business, for up to £ 13.8m. LTG’s shares climbed by 15.2pc, or 10p, to 76p.

But Carclo, which makes plastic parts for car lights and medical devices, fell 20.7pc, or 5.75p, to 22.1p. It was suffering from backlogs, as customers increased their orders to stockpile for Brexit.

As activity on London’s stock market finally begins to heat up Turkey- focused gas producer

Valeura Energy, which is aiming to frack near Istanbul where there are no restrictions on the controversial extraction method, is to float in London this month. It is already listed on Canada’s Toronto exchange, valued at £143m.