Car dealer prepares software arm sale
CAR dealer Pendragon is gearing up for a £60million sale of its Pinewood software business to bolster its finances against the biggest industry slump for nearly 20 years.
The company is understood to have hired advisers to review options for Pinewood, which provides software and services to dealers and fleet operators. Last year it made profits of £8million on sales of £21million.
Pendragon could sell or float off the business to provide cash to reduce its debts. It has been forced to slash its half-year dividend after a sharp drop in profits.
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The whole group is worth only £34.5million after a 90 per cent plunge in its market value during the past year.
Pendragon’s chief executive Trevor Finn warned at the half-year stage that the market for new cars would fall by about 15 per cent this year and he did not expect it to pick up until 2010.
Last week the Society of Motor Manufacturers and Traders said UK new car sales suffered their sharpest monthly fall for 17 years in October, when they were down 23 per cent on the previous year.
The crisis in the car industry has even raised fears over the survival of US giants Ford and General Motors. Carmakers are scaling back production in the UK, with BMW recently announcing its Mini plant in Oxford would shut for longer than expected over Christmas.
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