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Cambria Automobiles sees interim profits increase 45%

Top 20 AM100 group Cambria Automobiles has increased underlying profit before tax by 45% to £2.02 million for its interim results for the six months ended February 28, 2014.

Revenue was up 14.3% to £204.8 million over the period on the back of new vehicle sales which were up by 17.1%, used sales up 9% with a 3.7% improvement in profit per unit and an aftersales operation which accounted for 13.3% and 44.4% of group revenue and gross profit respectively.

Mark Lavery, chief executive of Cambria, said: “We have improved performance across all areas of the business and outperformed a growing UK new car market.

“Post period end, trading results in the key month of March were ahead of plan and the previous year and the board is confident of maintaining momentum in the second half.

“In line with our strategy to improve the favourable mix of Cambria’s portfolio, we continue to focus on further strengthening the group’s position in luxury and premium brands and are actively exploring acquisition opportunities which have the potential to fulfil our ambitions.”

He mentioned the impact of continuing "operational efficiencies" on the positive results, referring to an ongoing drive to improve the speed at which staff respond to customers' (known as guests in Cambria) enquiries and the quality of response, particularly via email and instant messenger.

Average response time has come down from two hours to just under an hour. The quality of response was also under the microscope with even spelling and grammar an issue.

Equal attention has also been given to employees' level of understanding of digital technology and its importance in the sales process, with the reluctant or less aware finding themselves in 'intensive care' for several months, receiving additional attention.

The correlation between sales success and the ability to communicate correctly and promptly - and in all ways - is evident in sales performance, Lavery said, having a direct result in turn on the group's performance.

"We're experiencing a tangible improvement in guest experience and the amount of vehicles we're selling, together with their add-ons and associated services," he said. "While we still make mistakes, we are aware of what they are, and so are addressing them."

The influence of the web on the way consumers make their buying choice was changing the role of the sales person, but it was no less critical. "Not all guests buy on price, otherwise there Gucci or Aston Martin wouldn't exist. The experience is critical to a buying decision."

On the current health of the new car market, he said he expects 2014 to remain "robust" with some stabilisation in sales rather than continuing months of year-on-year growth. "The volume of leads we're getting is high, our job is to ensure we don't make any mistakes in the way we deal with them."

On used cars, the average selling price had improved £600 year-on-year per unit to £1,285, but margins were being squeezed.

The strong March had seen a higher level of part exchanges going to auction, but transaction prices had been maintained.

In aftersales, revenues were down 3.2% YoY, but gross profit was £0.4m ahead to £11.6m. The reason for the revenue fall was a fall in parts sales. Margins were up on last year from 39.7% to 44.4% as emphasis moved to the service element of aftersales.

Broker N+1 Singer said of the group: "Although there is no news on acquisitions, Cambria is actively pursuing opportunities and currently has c£22m of available resources with which to fund deals.

"The absence of any increase in the interim dividend may, against a very positive trading backdrop, suggests something may materialise in H2 from the previously discussed pipeline."






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