TIDMCAMB
RNS Number : 6351Z
Cambria Automobiles Plc
04 September 2018
4 September 2018
Cambria Automobiles plc
("Cambria" or the "Group")
AIM: CAMB
Trading Update and Notice of Preliminary Results
The Board of Cambria is pleased to announce its trading for the
11 months to 31 July 2018.
The Group maintained its solid financial performance that was
delivered in the first half and its trading in the 11 months to 31
July 2018 was in line with management's expectations. This
performance was delivered alongside significant franchising
additions, changes and site developments which have made good
progress during the period. Whilst the results are behind prior
year, as previously flagged due to the pressures in the new car
market, the Board is confident of delivering a full year result in
line with market expectations.
Franchise and Property Portfolio Update
The Group has had a busy 2018, opening two fully refurbished
Bentley dealerships and one Lamborghini site, while also
establishing McLaren in a start-up facility at the Group's Hatfield
location.
Management are also delighted to announce that the Group's
second Lamborghini dealership, which has been developed at Royal
Tunbridge Wells, is scheduled to officially open on 6 November
2018. This showroom sits alongside the newly developed Bentley
dealership and enhances an existing Group freehold property. This
new opening increases the Group's representation in the High Luxury
Segment to three Aston Martin, two Bentley, two Lamborghini and one
McLaren franchise.
The Group is also pleased to announce that in September 2018, it
will be opening its first Peugeot dealership in Warrington to
replace the Fiat franchise on this site.
To facilitate the opening of the two Bentley and two Lamborghini
businesses, the Group has closed the Alfa Romeo and Jeep operations
and bodyshop in Chelmsford and the Honda and Mazda operations and
bodyshop in Royal Tunbridge Wells.
In June 2018 the Group closed its loss-making Blackburn location
which previously represented Fiat, Alfa Romeo, Renault and Volvo.
The freehold element of the site is now being marketed for
sale.
During the period, eight franchised outlets and two bodyshops,
representing approximately 18% of the Group's operations, were
either closed or re-franchised which caused significant disruption
in day to day activity.
In July 2018 the Group completed the Jaguar Land Rover Arch
concept development in Swindon and relocated its Jaguar dealership
from the adjoining facility and the Land Rover operation from its
previous site in Royal Wootton Bassett. The freehold of the Royal
Wootton Bassett facility is in the process of being sold subject to
planning consent for change of use.
The construction of the Group's Jaguar, Land Rover, Aston Martin
and McLaren dealership on one site in Hatfield commenced in
February 2018. The development is progressing well and the Group
will take occupation of the Jaguar Land Rover dealership in
mid-December and the Aston Martin and McLaren dealerships in
January 2019.
Trading Update
The Group's adjusted profit for the 11 months to 31 July 2018 is
behind that achieved in the prior year, consistent with the first
half to 28 February 2018 being 14.3% down year on year. The Board
is pleased that despite continued pressure in the new car market
seen during the second half, the Group continued to deliver a solid
financial performance with used car and aftersales performing well.
Focusing on the like-for-like businesses for the 11 months, the
trading performance is down 6.4% year on year with the reduced new
car performance partially offset by improvements in used cars and
aftersales.
Used vehicle sales continued to perform well and whilst unit
sales were down 6.6% (like-for-like unit sales down 2.6%) following
the closure of Swindon Motor Park part way through last year and
the franchising changes outlined above, the marginal reduction in
units has been more than offset by improved profit retention with
gross profit per unit on both a total and like-for-like basis
continuing to increase significantly. This performance has again
enhanced the profit from the used car segment of the business year
on year.
The Group's aftersales operations increased revenue by 2.5%
(like-for-like up 5.1%), with gross profit up by 3.8% year on year
(like-for-like up 7.1%).
Whilst new vehicle unit sales for the 11 months were down 16.8%
(like-for-like down 14.6%), the gross profit per retail unit
improved over the same period as a result of mix shift to the
premium and high luxury businesses, however in the Group's
like-for-like businesses the new gross profit per unit was down
3.2% against the background of margin pressure in the market.
The government's clean air policy narrative and the inconsistent
messaging around the forward-looking position on diesel engines has
created a reduction in consumer demand for diesel vehicles which
formed 47.7% of the new car market in 2016 and 42% in 2017. This
figure has now reduced to 32.5% for the seven months to July 2018.
The new car market in 2017 was down 5.7% to 2.54m units from the
2016 record registration levels of 2.69m and in the seven months to
the end of July the new car market was down 5.5% on 2017.
The changes in the emissions testing regulations to Worldwide
Harmonised Light Vehicle Testing Procedures ("WLTP") which is
effective from 1 September has led to each manufacturer assessing
its vehicle production or import strategy and this has created some
volatility in new car vehicle supply heading towards 1 September.
The potential for vehicle supply constraints with certain
manufacturers is anticipated to extend into quarters 3 and 4 in
2018.
Heading into the important September trading period, the new car
order book is building in line with our expectations.
Outlook
The general uncertainty in the consumer environment remains, as
does the pressure that vehicle manufacturers are under as a result
of the current Sterling exchange rate and new car supply
volatility. The Board is confident that the franchising changes and
property developments delivered in the period will add value and
lead to growth in the coming year.
The Group will announce its Preliminary Results for the year to
31 August 2018 on 21 November 2018.
Mark Lavery, Chief Executive of Cambria Automobiles plc,
commented:
"I am pleased that we continue to deliver solid financial
results in a difficult market which has not been helped by the
government's inconsistent messaging around its forward-looking
position on diesel engines. Whilst the Group's financial results
are behind prior year, as previously flagged due to the pressures
in the new car market, the Board is confident of delivering a full
year result in line with market expectations.
"The team has had a busy 2018 thus far with a number of
franchising changes and delivery of major property refurbishments
and developments. Whilst the property and franchising initiatives
have impacted the current financial year, they leave the Group well
placed with a significantly enhanced property portfolio and an
increase in representation in the High Luxury Segment. The addition
of two Bentley, two Lamborghini and one McLaren franchise have
helped diversify the Group's brand portfolio while also providing a
significant opportunity as these businesses mature in their new
sites. The Board is confident the platform is now in place to drive
future growth."
-Ends-
Enquiries:
Cambria Automobiles Tel: 01707 280 851
Mark Lavery, Chief Executive
James Mullins, Finance Director
www.cambriaautomobilesplc.com
N+1 Singer - Nomad & Joint Broker Tel: 020 7496 3000
Mark Taylor
Jen Boorer
Zeus Capital - Joint Broker Tel: 020 7533 7727
Dominic King
FTI Consulting Tel: 020 3727 1000
Alex Beagley / James Styles /
Fern Duncan
About Cambria - www.cambriaautomobilesplc.com
Cambria Automobiles ("Cambria") was established in 2006 and has
built a balanced portfolio of high luxury, premium and volume car
dealerships, representing major brands across the UK. The Group's
businesses are autonomous and trade under local brand names,
including County Motor Works, Dees, Doves, Grange, Invicta,
Motorparks and Pure Triumph.
The Group's strategy is to complement its existing franchise and
brand portfolio by acquiring earnings enhancing operations, using
its strong balance sheet and disciplined approach to capital
allocation.
Cambria's medium term ambition is to create a GBP1 billion
turnover business with a balanced Brand portfolio producing
attractive returns on capital.
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END
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