7:50 am, March 3, 2021
Lockdowns are having a ‘continued impact’ on the volumes of new and used cars that can be ‘sold efficiently’, listed dealer group Cambria Automobiles has revealed.
In an update to the Stock Market this morning, the group said new car retail sales were down 15.3 per cent for the five months up to the end of January.
Cambria – which operates under the Doves, Grange and Motorparks brands – represents a large portfolio of brands including Rolls Royce, McLaren, Aston Martin, Bentley and Jaguar Land Rover.
It said used car sales have been hit badly too – down 31 per cent for the group compared to the same period the year before – but gross profit per unit was actually up 16.4 per cent which has ‘partially offset’ the fall.
Aftersales revenue was down 14 per cent, but the contribution from the department was greater as costs had been cut.
Despite the falls, ‘trading performance’ was actually ahead of the same period the year before thanks to cost cutting measures taken by the company.
Cambria said: ‘This performance is a direct result of the Covid-related cost actions taken by the group in the 2019/20 financial year, combined with the board’s utilisation of government support packages including the Coronavirus Job Retention Scheme grant and business rates relief.’
However, the update warns there are difficult times ahead, especially as showrooms are closed to physical walk-in visits from customers during the March 21-plate change.
Cambria said its order bank for March was behind last year.
The company added: ‘Whilst the group’s trading performance in the first five months of the financial year is pleasing, given the potential impact that the Lockdown restrictions could have had in the period, the results have benefitted from the government support stimulus.
‘The various Lockdown and Tiering strategies, particularly through the important plate change month of March, will have a material impact on the group’s financial performance in the year to August 31 and, as a result, the board deems it prudent to continue the suspension of financial guidance to the market.’
Cambria said that even though March orders were down, the vaccine roll-out programme gives it hope and ‘an end to Lockdown 3 is in sight’.
The update added: ‘The group is working as effectively as possible in the face of the challenges outlined and continues to take a prudent approach to managing its cost base and cash flow whilst utilising all of the learnings from nationwide Lockdowns.
‘Following the work undertaken to operate safe and effective showrooms for our associates and guests in 2020, the group is confident of meeting consumer demand when allowed to welcome guests, hopefully from April 12, in line with current government guidance.’
Interim results for the half year to February 28 will be revealed on May 5.
Cambria Automobiles is the 14th most profitable car dealer in the UK according to our Car Dealer Top 100 list with EBITDA profits of £17m in 2019.
Industry analyst Mike Allen, of Zeus Capital, said he sees Cambria as one of the industry’s ‘key survivors’.
He wrote today: ‘Encouragingly, trading performance for the period is ahead year on year (H1 FY20A PBT of £6.3m) albeit we acknowledge this has been largely driven by management actions on costs and government stimulus.
‘While volumes have been impacted by the current lockdown, in line with wider market trends, gross profit per unit dynamics continue to be positive aided by Cambria’s premium mix.
‘Our forecasts remain suspended for now, although we anticipate reinstating estimates when Cambria reports H1 results on May 5.
‘We remain of the view that Cambria will emerge as a survivor in an industry facing unparalleled disruption and volatility at present.
‘The group is well managed with a solid balance sheet and has performed robustly in unprecedented trading conditions, taking a prudent approach to the management of both its cost base and cash flows.’
Cambria also revealed that throughout the pandemic it had remained up to date with all its VAT payments and did not use the VAT deferral scheme.
Cambria boss Mark Lavery recently told Car Dealer that manufacturers needed to give dealers an easier ride as they were operating in ‘incredibly difficult’ conditions.
He said, in an interview you can watch above: ‘In the national sales companies there may be a lack of understanding as to what we are putting our people through every day and that’s an area certainly we all have to work hard to improve.
‘There needs to be a genuine empathy between the national sales company and the retailers.’
