An uplift in underlying profit before tax has buoyed the latest year’s trading for AM100 dealer group Cambria Automobiles.
While the car dealer recorded a 4.8% year on year drop in revenues to £373.3m, which it puts down significantly to the end of the scrappage scheme, underlying profit before tax rose from £4.2m to £4.9m.
Chief executive Mark Lavery described the year to August 31, 2011, as “another strong year for Cambria” in a very difficult market.
He said the group continues to outperform its underlying markets and it views the future with confidence, plus caution.
“While the ending of the government sponsored scrappage scheme reduced revenues, the cost reduction actions taken during the year more than offset the reduction in revenues.
"This is the fourth successive year in which Cambria has delivered significant earnings growth and high level of return on shareholders? funds.
“I am pleased with the performance achieved by the Group against the backdrop of challenging new and used car markets.
"We continue to use this market weakness to drive forward our buy-and-build strategy, utilising our strong balance sheet.”
Although Cambria intends to expand through takeovers and improvement of underperforming dealerships, Lavery stressed that it will acquire only where the business case is right.
In one instance, Cambria called off one deal on the eve of completion due to changed terms from the vendor, despite incurring significant professional fees, he said.
Lavery told AM he sees the current market conditions as the new norm for motor retailers.
As such, Cambria is in the process of further rationalisation in order to reduce its cost base, with the likelihood of 80-100 job cuts across its business.
It is also reviewing areas where it can drive efficiencies through its group buying power, having already driven savings in areas such as legal and insurance services.