23 October 2017 – trading update
The group has issued a disappointing trading update covering the year to 31 December 2017 with adjusted pre-tax profits now forecast to come in at around £60m against £73m in 2016. However, it has also stated that it expects growth to resume in 2018. The reason for the shortfall in the current year has been a decline in demand for new cars and falling prices for used cars as consumer confidence continues to fall. To help combat this downturn the company will continue to place its software and online technologies at the heart of the business with used car sales and the aftersales offering being a point of focus. Clearly the statement is disappointing and has led to a significant fall in the share price but the shares were only modestly rated anyway and we would therefore not be surprised to see a bounce in the price going forward. For longer term investors the share price fall seems to have presented a useful entry point to the shares. BUY.