Pendragon has claimed that it is “well-positioned” despite the end of merger talks with fellow AM100 operator Lookers which would have created the UK’s largest car retail business.
A report by Sky News revealed that the UK’s former number one retail group by turnover had held talks with the AM100’s second-ranked group, Lookers, with regard to a potential merger over the weekend.
If successful, the talks would have resulted in a group with a turnover of almost £10 billion.
Sky alleged that Lookers had “snubbed” Pendragon, however, claiming that an insider for the group had suggested its leadership team were too heavily occupied with its COVID-19 coronavirus mitigation measures and the ongoing investigation by the Financial Conduct Authority (FCA) to advance the plan.
In a statement issued via the London Stock Exchange, Pendragon confirmed that the talks had taken place, but had now ceased.
“The Company confirms that it held outline discussions with Lookers suggesting they might explore the potential benefits of a combination of the two businesses and how this could be attractive to both sets of shareholders,” it said
“While Pendragon believed that such an exploration would have proved beneficial, these early discussions have now ceased.”
Pendragon, now led by recently-appoint chief executive Bill Berman, revealed a £117.4 million loss after tax and laid bare the full impact of “significant H1 losses” in a 2019 annual results statement published back in March.
In its latest statement regarding talks with Lookers, however, the group insisted that it “remains well-positioned having already taken significant steps to reshape the business and to cut costs both in advance, and as a result, of the recent events which have temporarily curtailed business activity.
In its report into the merger talks, Sky News pointed out that the combination of Pendragon and Lookers would create a car retail group with annual sales of close to £10 billion, but a combined market capitalisation of little more than £200m.
In March, Lookers set out to target “improved operational execution” in 2020 following the appointment of Mark Raban as its new chief executive.
It followed November 2019 plans to close 15 dealerships and roll-out stringent cost-cutting measures in a bid to arrest failing profitability as former CEO Andy Bruce and chief operating officer Nigel McMinn both left the business.
While those plans have proceeded, on March 24 the group announced that it will expand internal fraud investigations to its entire business after initial findings from one of its operating divisions resulted in an expected one-off charge of over £4m in its 2019 financial results.
Marshall Motor Holdings chief executive Daksh Gupta said that he agreed with Extinction Rebellion’s “sentiment towards climate change” but not the execution of its protests after seeing his dealership vandalised by campaigners.
Gupta took to Twitter hours after a string of attacks by the controversial campaign group on a number of other businesses in Marshall’s hometown of Cambridge to confirm that the AM100 retail group’s Jaguar Land Rover (JLR) dealership in the city had been one of the businesses targeted in the April 30 action.
His Tweet said: “Extinction Rebellion targets Marshall......fortunately the site is all safe and secure. Agree with sentiment towards climate change but not the execution.”
In its attack on the Marshall JLR site XR protestors daubed the message “no going back” and “let us breathe” messages across the glass front of the showroom in white spray paint.
Posters bearing the slogan “CLOSED FOR GOOD” were also stuck to the site’s main entrance.
According to CambridgeshireLive, the Schlumberger Cambridge Research site – a multidisciplinary research facility housing a team of more than 100 scientists and technicians – and a Barclays bank were also among the businesses which suffered damage to property…
Inchcape has appointed former Fujitsu director Duncan Tait as its new Group CEO after the departure of Stefan Bomhard prompted “strong interest and a group of high-quality candidates”.
Tait will join the board as group chief executive (designate) from June 1, according to a statement issued by the AM100 PLC, and will assume his full role on July 1 following a period of handover from predecessor Bomhard.
Tait said: "I am very pleased to be joining Inchcape and leading the business at such a dynamic time for the automotive sector.
“I look forward to working with a very talented management team as we navigate through the complexities of COVID-19, on the next phase of the company's growth plan, at the same time maximising the opportunities that will come from new and developing trends in the industry."
Inchcape began the search for a new chief executive when Bomhard resigned his post with the car retail and import business to take up a position as the chief executive of cigarette producer, Imperial Brands.
Bomhard officially leaves the business on June 30.
Inchcape’s replacement was most recently on the board of directors at $10 billion turnover Tokyo-listed tech company Fujitsu Ltd, with responsibility for EMEIA & Americas…
The National Franchised Dealers Association (NFDA) has said that it is vital that Government and car manufacturers “evaluate a support package that stimulates the market” following April’s 97.3% sales slump.
As the Society of Motor Manufacturers and Traders (SMMT) laid bare the impact on new car sales of the COVID-19 coronavirus pandemic in its car sales data from last month’s market lockdown, the franchised car retail body called for support to help rejuvenate the retail sector when conditions allow.
NFDA director, Sue Robinson, said: “NFDA has been talking to the relevant Government departments and manufacturers to ensure work can commence safely for the benefit of dealerships’ staff and customers.
“Over the coming months, it will be vital to evaluate a support package that stimulates the market and ensures the long-term stability of a sector which is key to the UK economy and provides employment to thousands of people.”
Marshall Motor Holdings chief executive, Daksh Gupta, echoed the NFDA’s sentiment. He said: “Hopefully it provides government more data that the sector needs further stimulus to support the 823,000 jobs in it.”…
Cambria Automobiles chief executive Mark Lavery has conceded that “over 100 redundancies” are possible within his car retail group when the Government's coronavirus job retention scheme’s (CJRS) furlough period ends.
Lavery said that he had been open with the AM100 retail group’s employees in a series of five weekly podcasts during the COVID-19 lockdown, stating that “there will be significantly fewer of us and we’ll return to a significantly changed business”.
Lavery said that he expects “Darwinian evolution” of the car retail sector with up to 25% to 30% of car retail businesses to go out of business or be taken over within the next two years as the effects of the pandemic continue to take their toll.
Speaking to AM following publication of an interim results statement for the six-month period to February 29, which was published today (May 6), he said: “We don’t yet know whether what we are facing is a recession or a depression.”
Lavery added: “Have we ‘war gamed’ redundancies? No. And at this stage the furlough scheme has been extended to the end of June.
“If (the Chancellor of the Exchequer, Rishi Sunak) doesn’t extend the scheme beyond that point then we will have to start planning. There is a possibility of over 100 redundancies.”
Lavery has taken a 50% pay cut and other board members have volunteered to reduce their salary and fees by between 20% and 50% after Cambria placed much of its workforce on furlough.
Around 12% of its staff are currently still working to provide aftersales functions and limited vehicle deliveries to keyworkers during the COVID-19 lockdown.
Lavery said that the business had delivered 22 vehicles since the closure of its showrooms, in-line with Government guidelines, on March 24.
He told AM that the group’s luxury franchise portfolio could help it recover trade from an aftersales point-of-view as lockdown restrictions are eased. “Many of the vehicles that we sell are designed to be driven and if they are stood still for six or seven weeks the first thing their owners should do is bring the to the dealership for a service,” he said.
However, he remains pragmatic about the outlook for the sector and said that ground would not be broken on the group’s planned new Aston Martin showroom in Solihull until things became clearer.
Lavery said that his decision were still based on a three-phased approach. He said: “First lockdown, secure assets and look after associates; second, a fast return to work with a small number of associates; finally, we wait for the end of the government support to see what the optics of the industry are like.”…
Cian O’Brien is to become director of Volkswagen Commercial Vehicles.
He will take over from Carl zu Dohna who left the brand to take on the role of chief commercial officer at Volkswagen Financial Services.
O’Brien will join the brand from his current role as executive vice president and chief operating officer at Audi of America.
Prior to taking on this role in May 2017, he was Audi UK’s Head of Sales (from 2014) and from 2016, interim Audi brand director.
He was also director of SEAT Ireland from 2012 to 2014.
O’Brien said: “Having worked in three different markets and in a range of roles spanning fleet, aftersales, product, used cars and sales, I’m ready to immerse myself in Volkswagen Commercial Vehicles, and looking forward to leading the brand through an exciting time.
“Not only is the world in a unique place right now, but we are also on the cusp of launching the all-new Caddy, our first electric vehicles and adding the ID. Buzz to our range.
“We have a fantastic heritage, and a fantastic future to look forward to, supported by a strong network of Van Centres and our Working With You promise.”
Volkswagen Group UK managing director, Alex Smith, added: “I’m delighted to be welcoming Cian back to the UK. His broad experience will be an asset to the team, and as a former Director of Volkswagen Commercial Vehicles, I know it’s a great place to be.
“I’d also like to thank Carl for his tremendous contribution over the last five years, and taking the brand from strength to strength.”
O’Brien will begin his new role on 1 July.