The boss of Cambria Automobiles has spoken out on why he wants to take over the company and place it into private ownership.
Car Dealer sat down for an exclusive chat this week with Cambria CEO Mark Lavery to hear first-hand why he wants to buy the listed dealer group and take it off the stock exchange.
Speaking at the company’s impressive Grange Jaguar Land Rover showroom in Hatfield, Lavery spoke just a couple of days after tabling an increased offer for the business.
The bid – 82.5p per share totalling £82.5m – was a takeover offer and was final, with shareholders being recommended to accept it.
Lavery, who founded Cambria Automobiles in 2006, has so far remained silent on why he’s making the bold move.
But he explained to Car Dealer his motives and that being a public company ‘hasn’t really worked’.
In the full interview, which you can watch at the top of this story, he said: ‘We were listed on the London Stock Exchange just over a decade ago at 50p per share, and a decade later, in April 2020, were down to 33p.
‘It makes you wonder what you’ve been doing for the past 15 years.’
He added: ‘It’s probably an unfair comparison with April 2020, because of the pandemic, and I think everybody was severely affected in our industry.
‘But then we did start looking and saying, well, what’s the share price been for the last five years?
‘That was high-40s to low-50s and we thought, well, hang on a minute, there’s got to be something fundamentally wrong because when we were listed, initially, for a significantly smaller company, making significantly less money, with a significantly lower value balance sheet, we spent a lot of time and a lot of money being listed.
‘And myself and the directors were questioning, well, if it’s not working for us, then can it be working for the shareholders? We came to the conclusion that actually, no, it doesn’t.
‘So, what do we see the future as? We spent a bit of time looking at it from a personal point of view – my family’s the biggest shareholder – and we decided that Cambria would flourish better in a private environment than it would do in the public domain.
‘And that’s the position we find ourselves in today.’
He added that being listed ‘was pretty pointless’ because Cambria didn’t have ambitions to be a dealer group with a £2bn to £5bn turnover.
‘It’s just not worked out as an efficient instrument at this point over the last five years,’ he said.
Cambria Automobiles has numerous brands in its portfolio including Aston Martin, Bentley, Ford, Jaguar Land Rover, McLaren, Rolls-Royce and Vauxhall among others, and operates under the Grange, Doves, Invicta and Motorparks names.
Lavery said its manufacturer partners were all ‘supportive’ of the move to take the listed dealer group into private hands.
Looking at the wider market, he declared the motor industry was currently experiencing a ‘once-in-a-generation change’ with the move towards e-commerce, electric vehicles and agency sales, and added: ‘We’ll see more change in the next five years than we have in the previous 100.’
Lavery had some bold statements to make on agency sales as well.
‘I’ve not actually seen a pure agency agreement yet. I’ve seen certain OEMs suggest an agency agreement, but when you check the detail, it’s not actually an agency agreement.
‘So, I think there’s probably quite a lot more to come. I don’t see all the OEMs going down the agency route because I think it’s a very new model.
‘And of course, an agent can’t have a target, he can’t have minimum standards to achieve, and he can’t be told what his building’s going to look like.
‘That is so fundamentally different to the way the franchise dealer system works in this country at this point.
‘I think the key thing we’ve got to be conscious about with agency is there’s a guest at the end of everything we do.
‘For customers, guests – whatever you want to refer to them as – the current distribution system is actually really very efficient. And then it’s up to the guest most of the time in getting a really strong deal.’
Lavery also had some strong words to say about the new and used car markets.
He revealed Cambria’s new car stock was down by 66 per cent year on year, and with markets being down in previous months, the knock-on effect on September would be ‘profound’.
Asked about the used car sector, he said: ‘There’s only one word to describe it: unprecedented.
‘I was quoted earlier this year as suggesting it was like 2009 when we came out of the last global financial collapse, but I’ve been in the industry a little while now – 34 years to be precise – and I’ve never seen a used car market like this. It’s an absolute phenomenon.’
Lavery said it had been driven by taking 1.2m vehicles out of the new car market over the past 18 months.
‘That’s 1.2 million vehicles that can’t be remarketed. That’s 1.2 million vehicles where if I look at our group, new car stock today, we’re down 66 per cent. year on year, going into September.
‘This is on the back of the semiconductor issue.
‘The knock-on impact that will have on September is, in my opinion, profound. And I can see the used car prices thing that is at, frankly, extraordinary levels, the likes of which we’ve never seen before, for the foreseeable future.’
Click the video at the top of the post for the full, in-depth interview