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Cambria says 2015 results will be better than expected

Mark Lavery

Car dealer group Cambria Automobiles expects its results for the year to August 31 to be ahead of expectations.

In a trading statement this morning the AM100 group said vehicle unit sales were up 9.1% (like-for-like up 1%), with unit sales to private retail customers up 9.3% (like-for-like up 2.1%).

Gross profit per retail unit had improved by 15.3% (like-for-like up 1.6%). 

Used vehicle unit sales are up 4.5% (like-for-like 1.3%) ahead of the same period in the prior year and gross profit per unit up by 8.1% (like-for-like up 6.7). 

Hours sold are  up by 8% (like-for-like up 2%) year-on-year.

The group says its September new car order book is “building well, which reflects the continuing strength in the new car market”. 

“Both dealerships have contributed in line with expectations in the 2014/15 financial year so far.”

Cambria’s chief executive Mark Lavery said: “We are delivering on our plan to grow the group and are continuing to perform well in a strong market. We are very focused on the work required to ensure this continues.

“Our strategy for organic growth, based on a balanced portfolio of brands combined with leading digital and retail systems, is yielding strong results. That has been complemented by acquiring attractive businesses which meet our strict criteria.

"The outlook for the market as a whole remains favourable and, as we begin our new financial year, we remain a dynamic participant with a clear strategy for creating shareholder value.”

A Cambria statement reads: “Both the Barnet Jaguar Land Rover dealership acquired in July 2014 and the Swindon Land Rover dealership acquired in April 2015 are integrating well and the board believes these businesses have significant potential.

Cambria’s preliminary results

Cambria expects to announce its preliminary results for the year to August 31 on Tuesday, November 24.

Analyst’s comment:

Cambria continues to trade well in a strong market, and vs. strong prior year comparatives.

New car sales were +9.1% or +1% on a life-for-like (LFL) basis, if we adjust for private retail customers, the LFL is running at 2.1%.

Gross profit per unit improved by 15.3% during the period - or 1.6% on a LFL basis.

Data from the SMMT for August suggests the market remains strong and was +9.6% at the headline level, albeit with private registrations running at +2.2%.

Ahead of the key September market, this data surprised us on the upside, although we suspect self-registrations continued to play a role.

The used car business also performed well, with unit sales +4.5% (LFL 1.3%) with gross profit per unit +8.1% (LFL 6.7%).

We suspect the company remains focused on stock turn and return on investment in used cars, which remains at the top end of the sector on this basis.

Growth in aftersales has also continued, which is encouraging given the rising UK car parc.

Forecasts: The company has indicated that its order book for September trading is “building well,” and we anticipate a strong outcome vs. what was an exceptional period last year.

We are not going to adjust our forecasts on the back of this statement, but anticipate earnings upgrades when the company has announced its results on November 24.

It is worth pointing out that our 2015-17 estimate earnings per share forecasts have all been upgraded by at least 20% as we have progressed through this calendar year, and this momentum looks set to continue. Mike Allen, Zeus Capital

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