Low interest rates and high consumer confidence have fuelled car sales, with the cash for company cars issue sparking strong growth in the premium business of more than 30 per cent.
“Individuals are choosing bottom end Audis and BMWs if they take the cash option,” says chairman Tony Bramall. “Our strong performance is down to our management style - conservatism to minimise the cost base.”
He is confident the group will exceed last year's full-year results, but warns that market conditions could deteriorate if consumer confidence weakens or interest rates rise.
CD Bramall's rise to No 2 followed its acquisition earlier this year of the Quicks dealer group, which added 45 outlets and £600m to the business. The purchase was funded with bank debt which has increased the company's gearing from 27 per cent to 79 per cent.
Bramall intends to bring this down over the next two to three years, effectively ruling out further significant purchases, although funds remain available for “acquisitions of a reasonable size”, he says.
“We now need to get the Quicks business performance to the same level as CD Bramall in terms of return on capital employed. This will happen over a period of time - it's not an instant fix - but both companies have a franchised-based divisional structure and are a good cultural fit.”
Quicks will now trade as Bramall Quicks and, in Scotland, as Bramall Laidlaw but will be renamed under the CD Bramall banner within two to three years.