Dealer group Cambria Automobiles has revealed trading in June and July was stronger than expected – but job cuts are on the way.
In a trading update published today (Sept 2), the company said the number of new cars sold to private customers in the 11 month period was down by 26.6 per cent, while total vehicle sales – including fleet and commercial – were down 27.6 per cent.
Cambria said its shift in franchise mix to the ‘high luxury segment’ helped to increase the profit per unit on each vehicle sold, which was up four per cent year-on-year.
Used sales, meanwhile, were down too by 21.6 per cent and ‘slightly offset by the continued improvement in gross profit per unit which was up 4.3 per cent’, it said.
Aftersales revenue ‘performed well either side of the lockdown’ and revenue for the 11 months was down by 13.6 per cent.
Cambria said it took advantage of a £3.7m CJRS grant and benefited from approximately £1.1m in business rates reduction.
It also added Aston Martin and Rolls-Royce franchises this year and by moving away from volume brands towards more premium marques, Cambria will have a ‘robust earnings stream in unprecedented times’.
The dealer group said, however, it’s in the process of implementing a ‘cost reduction programme’ which will involve ‘a significant reduction’ in jobs. Currently, the group employees around 1,200 staff.
Overall, Cambria said that while trading performance in June, July and into August were ‘encouraging’, the order bank for September is building at a slower rate than the previous year.
Board members are ‘concerned’ around the broader economy and consumer confidence heading into Q4.
In the update, Cambria also said it was concerned about the UK’s departure from EU, saying a 10 per cent tariff on importing cars and parts into the UK would have ‘a significant impact on sales volumes’, and more demanding emissions regulations will continue to impact the mix of cars available to sell.
Looking ahead, Cambria said it’s taking a ‘prudent approach’ and is ‘not providing guidance relating to the coming financial year due to continued uncertainty’.
Preliminary results will be announced for the year to August 31 on November 25.
Mark Lavery, chief executive of Cambria Automobiles plc, said: ‘I believe that we acted decisively in unprecedented circumstances to mitigate the impact of the forced lockdown on the group.
‘The challenges that faced the motor retail industry before lockdown still remain, as does the uncertainty created by Brexit.
‘The recession that is currently engulfing the UK has not yet hit motor retail.
‘The group has been prudent and has operated with a much reduced associate base so that the group is prepared for most eventualities.
‘At the same time, with our diversified portfolio of excellent brand partners, the group has demonstrated its resilience and we have managed our cash position well, ensuring that we keep up to date with all our obligations.
‘As a result of the actions taken the group’s financial position remains robust and we are well prepared for the challenges and opportunities ahead.’