Investing.com - Financial Markets Worldwide

Pinewood stock rises on major contract win with Global Auto Holdings

Published 14/02/2025, 10:42
© Reuters.
PINE
-1.19%

Investing.com -- Shares of Pinewood climbed 4% in London today following the announcement of a significant contract win with Global Auto Holdings, which operates Lookers in the UK and over 150 dealerships across the UK, North America, and Scandinavia. The deal is expected to deliver 'significant earnings' despite the slight impact on outer-year expectations due to the phasing of the roll-out.

The company has adjusted its profit before tax (PBT) forecast for the 11-month FY24 to £8.3m, slightly ahead of the consensus estimate of £7.8m and its own previous estimate of £7.6m, thanks to robust vertical sell-through. Yet, Pinewood has indicated that implementations with large customers, such as Global Auto Holdings, are now anticipated to be more heavily weighted towards 2026 rather than 2025, aligning with customer requirements.

Consequently, the company has revised its outer year PBT estimate from £12.5m down to £11m. Despite this, FY27 projections remain unchanged due to the early contributions from the new contract with Global Auto Holdings.

Analysts at Jefferies commented on the deal's significance: "This contract represents the largest non-associated major dealership group to adopt Pinewood, and the RNS states that it expects it to deliver 'significant earnings across the lifetime of the contract'. As a starting point, we might anticipate the deal being c.25% bigger than the Marshall deal (120 dealerships) for which we inferred an additional 4-5k new users and MT EBITDA contribution of £4m.

We also note that GAH's automotive distribution business has an additional captive dealership network (JEFe c.200 sites) that could be added to the roll-out. Reflecting the scale, warrants have been issued to GAH in respect of 6.1m shares (7%) exercisable at 330p in tranches as the Pinewood system is rolled out across the UK (5%), North America (1%) and Scandinavia (1%)."

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.