THE struggling car dealer Pendragon is looking to raise about £60m by offloading its little-known software arm Pinnacle.

Chief executive Trevor Finn has decided to cash in on the business, which provides automated back-office management for vehicle sales and marketing.

Advisers have been appointed to find buyers for Pinnacle, which has annual sales of £21m and made a profit before tax last year of £8.1m, up from £5.3m the previous year.

The move comes as Pendragon and its rivals tackle one of the bleakest periods for the car industry in recent memory.

The stock-market value of Pendragon has slumped this year as car sales have dived and concerns have emerged about the size of the company’s debt.

Two years after forking out £500m for Reg Vardy, Pendragon, whose shares closed on Friday at 5¼p, down from a 12-month high of 61p, now has a market value of £34.5m.

The company has already closed 71 dealerships from a total of about 300 nationwide, in addition to cutting its work-force by 500. More layoffs are likely as trading worsens.

Pendragon’s rivals are suffering, too. The stock-market value of Manchester-based Lookers has fallen by more than two-thirds in the past year to £61m.

In addition, car retailer Inchcape issued a profit warning in mid-October saying the UK market “had deteriorated significantly”. The company’s shares hit an all-time low of 62p the following week.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive