StockMarketWire.com - Auto dealer Pendragon said it had cut the size of its workforce and would pursue 'further cost base efficiencies' as part of a strategy overhaul hoped to generate underlying profits of at least £85m by the 2025 financial year.

Pendragon, which did not mention any specific job cut numbers, said efficiency gains made during the Covid-19 pandemic would deliver around £37m of annual benefit.

'In addition, we believe there are further cost base efficiencies we will be able to unlock across the property portfolio, through the replacement of manual process with systemic solutions and through reviewing existing key contracts and services,' Pendargon said.

The company said it was targeting an underlying pre-tax profit of £85-to-£90m by the 2025 financial year.

Efficiency gains made to date included closing down stores that had no pathway to sustainable profitability and reducing the size of the overall workforce.

Three strategic priorities identified by the company included unlocking value its in franchised UK motor division, growing its Pinewood unit and improving its used cars operation.

Unlocking value in the UK motor division would involve accelerating digital innovation and operating from 'a lean and efficient cost base'.

In its used car business, the company said it intended to create larger-footprint facilities to provide both stocking points, customer retail and collection points and fulfilment hubs for home delivery.

'Over the next five years we are targeting the development of eight physical locations at an approximate capital cost of £7.5m per location,' Pendargon said.

'We believe that a combination of a digital proposition and these physical stores will allow us to gain a meaningful share of the target market.'

Chief executive Bill Berman said the three strategic priorities set out by the company would provide a platform to transform its performance.

'Critically, our strategy is designed to equip the business to react to changing consumer patterns in the years ahead and ensuring, in particular, that we are well positioned to take advantage of digital innovation,' he said.




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