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Pendragon sees full year loss as unsold cars pile up

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(Reuters) – British car dealership chain Pendragon said on Wednesday it expected a pretax loss for the full year, as it blamed a challenging market for significant declines in new car and used car registrations.

Shares of the company were indicated to tumble nearly 25%, according to premarket indicators given by traders.

Pendragon, which recently replaced its chief executive and chief financial officer, has been plagued by rising labour costs for skilled technicians, and has also felt a squeeze on margins in the premium sector.

The company, which operates the Evans Halshaw, Stratstone and Quickco brands, expects significant losses in the first half of the year, resulting in a small underlying loss for the full year as the number of its unsold cars mounted.

Pendragon had previously said it expected 2019 to be broadly stable against 2018. It posted a pretax loss in 2018.

British new car registrations dropped 4.6% in May due to uncertainty over diesel policy and the government’s decision to cut incentives for plug-in hybrid vehicles, an industry body said earlier this month.

(Reporting by Samantha Machado and Pushkala Aripaka in Bengaluru, Editing by Chris Peters and Gopakumar Warrier)

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