Pinewood is poised to wrest market share from trade rivals working within the UK’s £100 million dealership administration system (DMS) market since separating from Pendragon, in keeping with monetary companies group Zeus Capital.

Since finishing its transition right into a pure-play Software program as a Service (SaaS) entity, Zeus mentioned it noticed vital potential in Pinewood’s North American three way partnership with Lithia – which has taken a 20% stake within the enterprise – which is able to assist drive the enterprise as a serious participant within the huge US automotive software program market.

Pinewood and Lithia, one of many largest motor retailers within the US, have every invested £10m within the three way partnership with perpetual rights to promote the Pinewood product within the North American market.

An accelerated progress plan will see Pinewood aiming to develop from its present 33,000 DMS software program customers to 48,000 by 2027 with its cloud-based answer. Earnings are projected at £27m in that 12 months, representing 59% progress versus an anticipated £17m for the 12 months to December 2023.

Whereas round 2,500 new customers will come from deploying the software program in Lithia’s 50 UK websites, Pinewood’s integration with 50 automobile OEMs and partnerships with producers ought to drive consumer quantity progress internationally.

“For instance, rolling out the software program throughout all Porsche websites in Japan is predicted so as to add round 4,000 customers and is already underway,” mentioned Zeus Capital in a brand new analysis paper.

Regardless of preliminary improvement that means Pinewood’s 49% stake’s might drop in worth, Zeus Capital’s mentioned its forecasts over the following two years reaffirmed its confidence and reiterated the case for funding.

“The potential for Pinewood to develop its consumer base each domestically and internationally, whereas sustaining strong EBITDA margins and money circulation conversion, seems promising.”

“Primarily based on the group’s focused FY27 EBITDA of £27m, we venture a reduced valuation of 23.7p per share, indicating a possible upside of 93%. Moreover, there exists additional progress potential because the North American three way partnership solidifies its presence within the expansive US automotive software program market.”

Lithia’s community of roughly 17,500 customers throughout 300 US dealerships signifies that if the three way partnership captures a portion of Lithia’s annual spend of between US$100m-US$150m on DMS, CRM, and tech stack, it might doubtlessly generate earnings of US$60m within the medium time period.