Pendragon PLC on Wednesday warned a shortage of new car availability will persist, with stubborn inflationary pressure also driving costs up.
Pendragon shares were 2.6% lower at 26.80 pence each in London on Wednesday morning.
The car dealer said it delivered a strong set of results for 2021 as it benefited from a buoyant used-car market.
For 2021, it posted pretax profit of £61.5 million, swinging from a £24.7 million loss in 2020, on revenue of £3.45 billion, up 18% from £2.92 billion.
Pendragon said it delivered record underlying pretax profit of £83.0 million, multiplied from £8.2 million in 2020.
Chief Executive Bill Berman said: ‘Our sector has experienced a unique set of trading conditions during the period, and I am delighted with how we have performed in this environment. We have made the most of the favourable market dynamics to deliver record underlying profits and we have also reported a return to profit for CarStore, our relaunched, used car brand.’
Pendragon said underlying profit in January and February was ahead of the same months in 2021.
In addition, the company said its cost base is lower than it was prior to the pandemic.
Costs will continue to be in focus in 2022, however, as inflationary pressures ramp up.
CEO Berman warned: ‘We expect existing supply chain constraints to continue in the current year, and we are mindful of the potential for further disruption to new vehicle supply chains as a result of the conflict in Ukraine. Despite this, we have the right strategy in place and we expect to make positive progress towards our long-term goals this year.’
Pendragon cautioned that a shortage of new cars looks set to continue in 2022.
The company added: ‘The board are conscious of inflationary cost pressures in labour and utilities in particular, which combined with the impact of business rates reverting to full levels will result in higher costs in FY22. We are mindful of the further impact that the conflict in Ukraine may have on both supply and costs.’
Nonetheless, it expects underlying pretax profit to be in line with board expectations in 2022.
In 2021, new car volumes fell 2.1% on a like-for-like basis.
Pendragon declared no dividend for 2021 but cut its net debt in half, to £49.7 million from £100.4 million.
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