Pinewood, a UK-based SaaS firm, raises its earnings guidance amidst plans for extensive US market entry.
- The company’s guidance for underlying EBITDA in FY27 has been revised from £27m to £30m.
- Pinewood’s rebranding to Pinewood.AI marks its transition into a pure play SaaS firm post-Lithia Motors joint venture.
- Despite UK businesses facing challenges in the US market, Pinewood is leveraging Lithia’s partnership for successful entry.
- Pinewood’s strategic move led to a 1.4% rise in shares, reflecting positive market confidence.
Pinewood, initially known as Pendragon, has strategically upgraded its earnings guidance, projecting an underlying EBITDA of £30 million for FY27, up from a prior £27 million estimate. This development reflects the company’s robust plan to penetrate the US market, a significant move orchestrated during a capital markets event with its stakeholders.
The Nottingham-based firm underwent a substantial transformation, rebranding itself as Pinewood.AI following a pivotal joint venture agreement with New York-listed Lithia Motors. In February 2024, Lithia Motors acquired Pendragon’s dealership groups—Stratstone, Evans Halshaw, California, and Car Store—transitioning Pinewood into a dedicated software-as-a-service provider.
This joint venture is critical for Pinewood as it allows Lithia to integrate Pinewood’s software into its systems, thereby facilitating its introduction to various dealership competitors in the US market. Pinewood’s CEO, Bill Berman, emphasized the importance of this partnership, stating, “The tech is great and the tech would work with or without having a partnership with Lithia. The challenge is if you don’t have an anchor tenant, it’s like building a big building — it’s much better to have half the floors leased out before you build it.”
The complexity of entering the US market is underscored by the experiences of other UK firms, such as the London-based fintech Zilch, which recently paused its American operations despite initially viewing the territory as a vital expansion area. Berman highlighted that without Lithia, the process would entail a labor-intensive and prolonged effort, emphasizing the strategic benefit of having a strong US partner.
Responding to the announcement, Pinewood shares saw a 1.4% increase to 340p, with a significant 13% rise over the past week. This positive shift was further fueled by the company’s recent five-year contract agreement to provide services to the Marshall Motor Group.
Pinewood’s strategic maneuvers and strong partnerships position it well for a successful entry into the US market.
