MIDAS SHARE TIPS: Car sales software company Pinewood plans global expansion

In the early 1950s, Britain was the world’s largest exporter of cars, vans and trucks. Even as production in America soared, British manufacturers retained a top position in the car trade.

Today we are best known for top models, from Bentley and Rolls-Royce to Aston Martin and McLaren.

But the wider industry still contributes billions of pounds to the economy and employs more than 750,000 people. Most work at approximately 4,600 car dealerships, selling new and used vehicles nationwide.

Buying a car should be an enjoyable experience. Too often it’s time-consuming and tedious: too much paperwork, too much sales talk, too much hassle.

Pinewood Technologies strives to make the process smoother and more enjoyable for sales staff and their customers.

Pinewood operates in the automotive industry and specializes in software to simplify the way cars are sold, maintained and repaired.

The shares are priced at £3.38 and should rise much higher as CEO Bill Berman rolls out his strategy here and abroad.

For many years, Pinewood was part of Pendragon, the car dealer behind brands such as Evans Halshaw and Stratstone.

Widely regarded as a hidden gem, Pinewood developed cutting-edge technology, but growth was limited because Pendragon’s rivals were reluctant to purchase software from a competitor.

However, in February this year, Pendragon’s retail arm was acquired by one of America’s largest car dealer groups, Lithia.

The company has more than 300 locations in the US and Canada and annual sales of approximately 100,000 vehicles.

The deal left Pinewood as an independent entity, still supplying technology to Pendragon but no longer tied to the apron strings of its former parent company. Berman has signed many new contracts since then, but most have been relatively small.

However, last week the group announced a deal with Marshall Motor Group, one of Britain’s largest car retailers with around 143 dealers, which sells cars, vans, trucks and motorcycles for brands from Jaguar to Skoda.

Pinewood will now work with more than 1,600 showrooms not only in the UK, but also in Eastern Europe, Asia and South Africa. But for Berman, this is just the beginning.

Born and raised in California, he spent 21 years at America’s largest auto dealer, AutoNation, where he rose to become president of the company. He joined Pendragon in 2019 as a non-executive director, but quickly rose to CEO after the incumbent president resigned.

Berman has been interested in IT since his college days and saw Pinewood’s potential from the start.

Covid postponed plans to make the company independent – ​​now all systems have to work.

A special meeting with major investors last week highlighted the scale of Berman’s ambition, spread across four key pillars.

First, win more business in Britain, just like the Marshalls contract. Second, stimulate growth in Europe, Asia and southern Africa. Third, develop new products such as AI chatbots and data analytics for businesses. Fourth, and perhaps most importantly: moving to America.

Setting up shop across the Atlantic can seem like a daunting task. But Berman has Lithia by his side. The US company has a 25 per cent stake in Pinewood and the duo plan to work together to develop, test and roll out British technology in the US.

Rivals exist, both here and there, but most offer products that are clunky, limited in scope, or both. Offered as a service, Pinewood’s software covers every aspect of car ownership, connecting manufacturers, dealers and consumers.

Not only can purchases be processed more efficiently, but maintenance and repairs also become significantly less hassle for customers and technicians.

When a car is serviced, Pinewood technology ensures owners can monitor the entire process.

When new parts are needed, employees can upload videos so customers can see what’s wrong and approve repairs online. And if households own more than one car, that is also clear, avoiding repeated calls from overly eager dealers.

Importantly, Pinewood’s kit works for all vehicles, from trucks and lorries to electric cars.

City agents have high hopes for the company, predicting a 61 percent increase in profits to £12.6 million in 2025 and £17 million the year after.

Midas judgment: Britain was once a big cheese in car production. Now Berman also wants to make Pinewood a global leader – as a provider of top software for dealers around the world.

An experienced hand at the helm, he is determined to succeed and the stock should go far if he does. At £3.38 they are a good point for the long term.