Vehicle delivery times hit Pendragon leasing results
07 August 2015
Author: Tristan Young
Pendragon Vehicle Management, the leasing arm of the UK's largest dealer group, has seen turnover and profits fall dramatically for the first half of 2015, but maintains it is on course for fleet growth by year-end.
The leasing division reported a drop of 46% in revenue and a 58% fall in profits.
In the first six months of this year turnover was £4.7 million, against £8.7m for the same period last year. Profits dropped from £3.3m to £1.4m, over the same period, according to the firm's interim results released to the London Stock Exchange last week.
Speaking exclusively to BusinessCar, Neal Francis, the firm's managing director, said the results were "purely a matter of timing" and blamed long delivery times on new cars, which in turn pushed disposal income into the second half of the year.
"We have a very loyal customer base and a good order bank for the second half of the year. A significant proportion of our revenue is derived from returned vehicles," he said.
"This half year has only seen rental income not the expected disposal income as customers extend their contracts waiting for the exact new cars they want."
When pressed on the current fleet size, Francis said that Pendragon did not give monthly updates, but promised: "The second half performance will show a significant improvement and the fleet size will be larger than last year due to growth."
The company currently sits at number 16 in the BC50 listing, issued in 2014, with almost 14,000 vehicles, up 1000 from the year before. Francis went on to promise a greater figure in the next BC50 which is due out in October.
The leasing division was rebranded as Pendragon Vehicle Management earlier this year from Pendragon Contracts with a new website aimed at attracting more customers.
Pendragon plc, the leasing firm's parent company, reported much improved half-year results with pre-tax profits for the six months to 30 June up £7.5m to £40.3m. This is a 22% rise on the same period last year. Half-year revenue was also up (10.7%) at £2.29 billion.
Meanwhile, Lex Autolease, the UK's largest leasing company, achieved fleet growth of 6500 vehicles equating to a 2% increase during the first half of 2015, the firm's first half-year results have revealed. The 6500 vehicle hike represents a year-on-year rise in registrations of 6%.
Lex said it delivered 37,500 cars and 10,500 commercial vehicles during the first half of this year. It also added 8000 new customers during the same period.
"Our customers continue to upgrade their fleet and have shown strong interest in our new products and services." said Tim Porter, managing director of Lex Autolease. "Our focus on expanding into the small and medium sized business market and helping these businesses see the benefit in leasing rather than buying vehicles outright, is also reaping dividends.
"We will continue to invest heavily in our business to ensure that we continue to meet evolving business needs," Porter continued.