Redundancies and group leverage of services are on the cards at Cambria Automobiles as the group prepares for the tough 2012 market.

Chief executive Mark Lavery told AM the company is in the process of further rationalisation to reduce its cost base, with the likelihood of 80-100 job cuts.

It is also reviewing areas where it can drive efficiencies through its group buying power.

That comes despite Cambria achieving what Lavery described as “another strong year” in its recent full financial year to August 31. The plc’s results showed an uplift in underlying profit before tax from £4.2 million to £4.7m despite a 4.8% downturn in turnover to £373.3m.

However, Lavery described the market as “very difficult” and he sees the current conditions as “the new business as usual” for motor retailers, so this summer he tasked all his general managers to identify cost savings.

“There will be two sorts of operators in our industry, the quick or the dead,” he said.

Nevertheless, the group continues to outperform its underlying markets and it views the future with confidence, particularly regarding opportunities to buy struggling businesses where the deal is right.

“I am pleased with the performance 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,” he added.

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 and the acquisition represents good value.

The group has completed only one acquisition in the last 12 months, which shows the caution and diligence with which it approaches pro-spective targets.

That acquisition, of a loss-making dealership in Southampton, brought Vauxhall to Cambria’s portfolio. Now Cambria intends to build similar scale with Vauxhall as it has with Ford, with which it has five locations.

In its year to August 31 Cambria sold 8,155 new cars, 11% down on the scrappage-fuelled prior year, and 14,217 used cars, 1% up year-on-year.

Gross margins improved slightly in all areas of operations.

No room for Lotus

Cambria revealed it is not continuing to represent Lotus Cars at Preston Motor Park.

AM revealed in 2010 that the British sportscar maker was terminating its entire network and re-issuing franchise contracts to fewer, larger dealerships.

Its requirement of a seven-figure investment for new franchise standards and facilities was not acceptable to Cambria, Lavery said.

Cambria lacked confidence in Lotus’s product plan.

He added: “Lotus is a brand that in the past was hugely significant, but looks a bit confused going forward.”