Revenue rises, underlying profits narrow for Pinewood Technologies

2nd Oct 2024 10:55

(Sharecast News) - Pinewood Technologies reported strong growth in revenue and gross profit for the first half of the year on Wednesday, driven by a successful system rollout in its key UK market.

The London-listed firm said that for the six months ended 31 July, its statutory revenue from continuing operations increased 46.4% year-on-year to £16.1m, up from £11m in the first half of last year.

Gross profit from continuing operations also rose significantly, up 48% to £14.5m, compared to £9.8m a year earlier.

However, underlying operating profit from continuing operations declined 13% to £4m, down from £4.6m, due to strategic cost increases in the first half.

The company ended the period with a cash balance of £13m and returned £358.4m to shareholders through a special dividend of 24.5p.

Pinewood said it was continuing to make progress with its strategic partnership with Lithia Motors, successfully rolling out its system across Lithia's UK store network, with completion expected by December.

Additionally, Pinewood started discovery and planning for a similar rollout in the US market.

Post-period, the company invested $4.2m in automotive AI firm Seez App, gaining exclusive US distribution rights to Seez products, which it said would enhance its offering as it expanded into the US alongside Lithia Motors.

Looking ahead, Pinewood said it remained optimistic despite broader macroeconomic challenges, adding that it expected to meet full-year market expectations for underlying profit before tax.

The board noted that discussions with potential new customers, both in the UK and internationally, were well progressed.

A full strategy update was scheduled for 24 October at the company's capital markets event in London.

"Pinewood had a great first half of the year, with impressive double-digit growth in both revenue and gross profit, and we have also made good progress in expanding our customer base," said chief executive officer Bill Berman.

"During the period we have prioritised rolling out our system to the UK dealerships of our strategic partner Lithia Motors which has been very successful.

"The global market for dealer management software is fragmented and we believe we are well placed to grow our business in our key markets of the UK, Northern Europe, Asia Pacific and North America - where our position is strengthened by our partnership with Lithia, the largest dealer group in North America."

Berman said that to support those ambitions, Pinewood continued to invest in its platform to add new features to ensure it remained a highly secure, best-in-class automotive retail ecosystem.

"After a positive start to the year, we are looking forward to making further progress in the second half."

At 1109 BST, shares in Pinewood Technologies Group were down 9.35% at 326.78p.

Reporting by Josh White for Sharecast.com.