LONDON, Oct 23 (Reuters) - British car dealership chain Pendragon on Monday warned on full-year profit, blaming a decline in demand for new cars and the consequent price correction in the used car market.
Pendragon also said Chairman Mel Egglenton has stepped down for personal reasons, with immediate effect, and has been replaced by Chris Chambers, a non-executive director since 2013.
The group said it now expected a pretax profit of 60 million pounds ($79.3 million) in 2017 versus previous expectations of 75.2 million pounds, according to Reuters data, and 75.4 million pounds made in 2016.
Pendragon said it expected to return to profit growth in 2018.
Following a strategic review the firm will now focus on developing its software and online technologies to fulfil customers’ vehicle and servicing needs.
“During the quarter (to Sept. 30) as consumer confidence waned we experienced significant market pressure,” said the firm.
It expects the new car market to continue to decline this year and the first half of 2018 as car manufacturers continue to adjust to the reduced level of demand for new cars.
Pendragon said its business was underpinned by stable aftersales profitability and said it expected its used car volumes would continue to grow.
Its like-for-like revenue grew by 3.7 percent in the three months to Sept. 30, while underlying like for like pretax profit was break even.
Shares in Pendragon, down 7 percent so far this year, closed Friday at 29 pence, valuing the business at 413 million pounds ($546 million). ($1 = 0.7567 pounds) (Reporting by James Davey; editing by Kate Holton)