Pinewood Technologies pivots to software after sale of legacy Pendragon business
Pinewood Technologies, formerly known as Pendragon, has posted its first results since its shift from motor dealership to software company.
On Thursday, it reported revenue of £24.5m from its software unit in the 13-month period ended January 2024, while its discontinued car business, Pendragon, reported revenue of £4.3bn.
Revenue from its software operations rose from the £19.1m it achieved in 2022, although this was only a 12-month period. Operating profit increased from £7m in 2022 to £10m in the 13 months to January 2024.
In September last year, car dealership group Pendragon agreed to a proposed sale of its UK motor business to US dealer giant Lithia Motors for £250m, sending shares soaring. Shareholders approved the deal the following month.
The firm remains listed on the London Stock Exchange but changed its name to Pinewood Technologies. It said it sees “materially enhanced opportunity for growth” following the creation of its standalone software as a service (SaaS) business.
Pinewood, which provides cloud-based management software for car dealerships, plans to roll out its system across the Lithia network in both the UK and US.
Ian Filby, chairman of Pinewood, said: “We are very pleased to be reporting the first set of financial results for Pinewood following the successful sale of Pendragon’s UK Motor and Leasing divisions to Lithia Motors.
“We have continued to expand our customer base while sustaining high levels of customer retention, which is reflected in a net user churn rate of c.2%. This contributed to strong growth in revenue and profit in the period.
“We are excited by the opportunity that lies ahead for Pinewood as a standalone business. Following the transaction with Lithia, the business is in a robust financial position and is well positioned for growth through product innovation, user growth in existing territories and accessing the North American market in partnership with Lithia through a joint venture agreement,” he added.
Shares ticked up slightly on Thursday, as the company also revealed it is in talks with a number of potential customers in the UK and globally.
Chief executive Bill Berman said: “Although Pinewood was established c.40 years ago, we are treating this next phase of Pinewood’s expansion similar to that of a start-up.
“The removal of barriers to accessing large parts of the UK customer base that existed under Pendragon’s ownership will facilitate rapid growth in the UK as well as accelerating our international expansion.”