Cambria Automobiles has reported a sales slide in the 11 months to the end of July 2021.
In a pre-close trading update to the London Stock Exchange this afternoon (Aug 27), the company – which is at the centre of an £82.5m buy-out offer by chief executive Mark Lavery – said sales of new vehicles to private customers fell by 3.9 per cent year on year.
Total new vehicle unit sales, including fleet and commercial, were down three per cent. Meanwhile, the number of used cars sold over the period fell by four per cent. Aftersales revenue, however, improved by 1.8 per cent.
It highlighted supply issues in the new car market because of the global shortage of semiconductors, and said this was continuing to affect the availability of new cars.
That in turn was ‘having a knock-on effect on the demand for used cars and the lack of liquidity in the used car market is driving demand to exceed supply’. That meant used vehicles were appreciating in value.
It said trading during its second half – after February 28 – had ‘been pleasingly in line with pre-pandemic seasonality and in line with management’s expectations, despite the uncertain trading environment and a number of market challenges’.
Also in the update Cambria said it received £900,00 under the Coronavirus Job Retention Scheme during the 11 months, and had benefited to the tune of some £3.1m in business rates reductions.
The group sold its Ford dealership in Wimbledon to TrustFord as well as closing its new car department at Dees of Croydon, its Volvo dealership in Croydon, the Volvo new cars sales department in Horsham, plus Volvo sales and service franchises in Gatwick.
Looking ahead, Cambria said there was still uncertainty in the new and used car markets because of supply issues.
It believes there’ll be a correction at some point in the used car market. However, it will stay uncertain until the new car market normalises.
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‘There also remains the challenges of associate absences resulting from Covid-19 and the general labour shortages in the UK,’ it said.
Cambria revealed that its new car order bank for September was ‘significantly behind’ the previous year, while the availability of new vehicles from stock was ‘significantly reduced’.
However, it said the used car market looked like it would remain strong during September, as demand continued to exceed supply.
In the update, Lavery said: ‘I am pleased with the performance of the group in a highly unusual market where the supply constraints are driving up prices of the vehicles that we sell.
‘The cost actions taken by the group last year have reduced the operating expenses and this has enabled the group to continue the strong performance seen in the first half of the financial year.
‘Given the challenges around vehicle supply and the ongoing impact of Covid-19 on the business, we must maintain a cautious outlook whilst optimising the immediate returns from the strong used car market.’
Cambria is currently subject to a recommended final cash offer of £82.5m by Lavery. The first closing time and date had been 1pm on September 3, but Lavery said this afternoon (Aug 27) that he intended announcing an extension to the offer.
Click on the video above to see our exclusive interview with Mark Lavery on why he wants to buy Cambria Automobiles and take it off the stock market