The owner of the Evans Halshaw and Stratstone car dealership brands, Pendragon, saw its share price fall almost a fifth after issuing a profit warning.
The franchise operator said it had witnessed a fall in consumer confidence in the three months to 30 September while the value of used car sales had been affected by a price correction to reflect that.
The company said it now expected underlying pre-tax profits of £60m for 2017 as a whole – down on previous market expectations of £75m.
That was despite third quarter revenue growth of 3.7% on a like for like basis – with used car revenues rising 18.1%.
Pendragon said its new profit forecast reflected wider industry concerns that sales will remain under pressure while household budgets continue to be squeezed though it expected to return to growth next year as pricing returned to normal levels.
Earlier this month, industry body the Society for Motor Manufacturers and Traders (SMMT) reported that new car sales had fallen for the sixth month in a row in September.
It is usually one of two boom months for the sector over the course of a year because it coincides with the release of new plates.
The SMMT blamed a fall in consumer confidence caused by economic and political uncertainty and confusion over Government air quality plans.
Pendragon said its new car sales were in line with lower industry volumes and business was being underpinned by used car sales growth and aftersales profitability.
It announced that a strategic review had led to a decision that investment would be focused on the development of its software and online technologies to fulfil customers’ vehicle and servicing needs.
The company also reported the departure of its chairman Mel Egglenton – stepping aside with immediate effect, for personal reasons to be replaced by Chris Chambers – a non-executive director since 2013.
Pendragon shares – down around 7% this year so far – were 15.5% down in late morning trade.
Source: Sky News