Pendragon CEO to leave after just three months in the job
Pendragon has announced the departure of its chief executive after just three months in the job and just two weeks after the car dealer issued a profit warning.
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Market Herbert will leave the company - whose shares tumbled earlier this month after a profit warning - with effect from 30 June, "by mutual agreement".
Pendragon has already begun the formal process to appoint a new CEO and a further announcement will be made in due course. In the interim, chief operating officer Martin Casha and chief financial officer Mark Willis will lead the business on a day to day basis, reporting to chairman Chris Chambers.
As a result of Herbert's departure, the strategic update originally due in late September will now be postponed until the appointment of a new CEO is concluded.
Chambers said: "The board remains fully committed to realising the long-term strategy. In the nearer term, despite challenging market conditions and the costly stock reduction programme, our focus will remain on taking steps to improve the performance of the business as outlined in our recent financial and operational review."
Pendragon said earlier this month that it was expecting a full-year loss, as it highlighted a "challenging" market, with new and used car registrations declining.
On 12 June, the group said its 2019 performance was expected to be hit further by "certain internal operational challenges". As a result, it expects to make a "small" underlying pre-tax loss for the year, with the first half of the year set to be "significantly" loss-making before it returns to overall profitability in the second half.
At 0900 BST, the shares were down 5% at 16.82p.
Broker Liberum said "any CEO coming in to Pendragon was going to have his work cut out".
"While not explicit in the statement, the conclusion we draw from today's announcement is that there may have been a difference of opinion on the level of change required," it said. "From our perspective, we remain to be convinced on the Car Store stand-alone used car strategy, particularly given the business is expected to make a loss of £25m this year."
Liberum has a 'sell' rating and 10p price target on the stock.
Independent retail analyst Nick Bubb, who wrote when Herbert was appointed that he would be "cursing the legacy of his predecessor," said Herbert was "evidently fed up with the mess".