Sparks

Pinewood reported H125 results (six months to 30 June) that showed 21.7% revenue growth compared to the six months ended 31 July 2024, and adjusted EBITDA 14.5% higher over the same period; management noted that as expected, the acquisition of Seez slightly diluted margins. The company has had an eventful year since its Capital Markets Day last October, including winning contracts in the UK with Lookers and Marshall Motor Group, the acquisition of Seez, contracts in Japan with VW/Audi and Porsche, the acquisition of key customer contracts from its South African reseller and buying out Lithia’s 51% stake in the US joint venture.

In the short-term, the company expects the accounting treatment of the Lithia JV buyout combined with a slightly delayed start to the Marshall Motors rollout (now expected to start a quarter later in Q126) to reduce FY25 adjusted EBITDA to £15.5-16.0m, compared to current consensus of £18.3m. In the longer-term, however, management is confident of Pinewood’s outlook and has announced an ambitious target of £58-62m in adjusted EBITDA by FY28 (it had previously guided to adjusted EBITDA in the high £30m’s by FY27). This growth is underpinned by the growing market share in the UK and Japanese markets and more significantly, by the opportunity to roll out its software across North America, where pilots in two US Lithia stores are expected to begin in Q425.