June 27, 2019 / 9:19 AM / 5 months ago

Pendragon boss quits after just three months steering UK car dealer

(Reuters) - Pendragon Plc’s Chief Executive Mark Herbert is leaving the car dealership after only three months in charge during which the company warned it would make a loss this year.

Pendragon, which operates the Evans Halshaw, Stratstone and Quickco brands, said that a strategic update scheduled to be announced in September will be delayed until a new CEO is named.

Herbert has stepped down by mutual agreement and will leave the company on June 30, the company said in a statement. He replaced Trevor Finn who was in charge of the company for almost three decades before he retired this year.

Shares in the company, which have fallen about 37 percent since Herbert took over as CEO on April 1, fell another 4% in early trading.

A source familiar with the company told Reuters that the abrupt change was because of a “difference in priorities,” with the company wanting to focus more on the market for used cars. Herbert was not immediately available for comment.

Herbert, who spent 20 years as an executive at the Jardine Matheson Group before joining Pendragon, has a long background in the new car and franchisee markets.

Two weeks ago the Nottingham-based dealership warned of a pretax loss this year, citing weak demand for both new and used cars.

Industry figures released earlier on Thursday showed British car production fell by 15.5% in May, the 12th month in a row of declines due to model changes and falling demand both at home and abroad.

Liberum analysts said that the company’s statement about remaining “fully committed to realising the long-term strategy” implied a difference of view with Herbert “on how best to fix Pendragon.”

While the company searches for a permanent replacement, Chief Operating Officer Martin Casha and Chief Financial Officer Mark Willis will lead the business on a day to day basis, reporting to Chris Chambers, its chairman.

“In the nearer term, despite challenging market conditions and the costly stock reduction programme, our focus will remain on taking steps to improve the performance of the business as outlined in our recent financial and operational review,” Pendragon said in its statement.

Shares of the London-listed company were down about 4% at 17 pence at 0830 GMT, giving it a valuation of just under 250 million pounds.

Reporting by Shariq Khan and Samantha Machado in Bengaluru; Editing by Bernard Orr/Keith Weir

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