Pendragon and Inchcape make triple-digit share price gains

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Automotive News Europe reports that UK car retail groups Pendragon PLC and Inchcape PLC each gave shareholders triple-digit returns for the quarter despite sales in their main market beingdown by more than a quarter in the first three months of the year.

Pendragon’s value increased 355.87 percent while Inchcape was up 111.59 percent, according to Automotive News Europe/PricewaterhouseCoopers Transaction Services Shareholder Value Index.
By comparison, Pendragon’s shareholder value declined 85.13 percent in the fourth quarter of 2008 and Inchcape’s was down 83.73 percent.

The rival dealer groups have seen their share prices increase following news that each company is reviewing its financing structure and talking with its lenders to make changes to its loan terms.
Since January, Pendragon’s share price has risen from less than 3 pence to nearly 10 pence.

“We are having discussions with lenders regarding changes to our loan agreements which would make them more appropriate for anticipated future trading conditions,” the company said in a statement in response to a rise in its share price.

Pendragon’s move to streamline its finances follows a similar strategy adopted by bigger rival Inchcape.
Inchcape had said in December it was in talks with its lenders for a possible change in its financing arrangements to help it weather a downturn in trading in 2009.
Since then the company’s share price has nearly doubled to about 80 pence.

All of this is happening despite U.K. new-car registrations in the first three months being 29.7 percent lower than a year ago — equivalent to 200,000 fewer cars sold, the Society of Motor Manufacturers and Traders said April 6.

Stern Group was the only retailer in the sector covered by ANE/PwC shareholder value index to have a decline in the quarter. It was down 28.52 percent.

Source: Automotive News Europe