Cambria Automobiles appeared to be reaping the rewards of refranchising into the high-luxury sector with a set of H1 financial which detailed a 4.5% increase in turnover and 14.6% rise in underlying profit before tax.
New car sales declined by 23.4% to 3,432 (H1 2018: 4,478) and used car sales by 8.8% to 6,235 (H1 2018: 6,833) during the period to February 28, but the average profit per unit sold increased by 30.6% and 7.4%, respectively, to mitigate the effects of the contracting market.
Overall turnover increased to £308.3 million (H1 2018: £295.1m) and underlying profit before tax to £5.5 million (H1 2018: £4.8m), partially as the result of the group’s withdrawal from certain unprofitable franchises and opening of new retail sites with the likes of Aston Martin, Bentley, Lamborghini and McLaren.
Aftersales revenue, meanwhile, increased by 6.5% to £37.5 million (like-for-like up 2.7%) with a 3.6% improvement in gross profit to £14.2 million.
Speaking to AM following publication of today’s (May 9) interim results, Cambria chief executive Mark Lavery, said: “The first half results compare with the first half of last year, which was a massive period of change for us.
“We shelved our operations with Fiat and Alfa Romeo in Chelmsford and then Honda and Alfa Romeo in Tonbridge Wells at a time when the McLaren facility down there was a shed and Peugeot wasn’t even on the radar to come and replace Fiat at Warrington.
“Now the transaction prices we are dealing with across the group are generally far higher because of our high-luxury franchises.
“That said, seven or eight of our 27 franchised sites are now very immature, so we’re confident that there’s a lot more to come from them.”
Franchise developments at Cambria during the reported period included the opening of the new Peugeot dealership in Warrington, the group’s second Lamborghini dealership, the occupation of the Hatfield Jaguar Land Rover Arch-Concept dealership and the £2.76 million disposal of a Royal Wootton Bassett freehold site following relocation of Jaguar Land Rover to Swindon in the previous financial year
Following the end of the period, Cambria has also opened a new Suzuki dealership in Maidstone, acquired land in Brentwood for development of dealership facilities, opened a Citroen dealership in Oldham and moved into the recently-completed Hatfield Aston Martin and McLaren dealerships which will open in the coming fortnight.
Lavery said: “We have put the hard yards in to change the way the company looks and command more of the HLS space, but we are still a volume brand player.
“We don’t like to switch franchise partners but when it no longer makes sense to sell new cars from a certain brand and they no longer listen, it’s time that both parties go their own way to pursue new relationships.”
The results of the changes are a set of interim financials which are “ahead of management’s expectations”, Cambria’s report stated.
The Group has continued to deliver on its Brand portfolio and property strategies in the period. Based on the results of the first half and the March performance, the Board expects that performance for the full financial year will be ahead of current market expectations.
And the group maintains that it remains well-placed for further growth with its manufacturer partners.
Its perational cash flows were maintained during the period, with a cash position of £22.9 million (H1 2018: £16.1m) and net debt of £3.2 million (H1 2018 net debt: £0.4m) following £10.5 million of capital investment (£8.6m in freehold property).
Cambria recorded what it referred to as “a strong balance sheet”, with net assets of £60.6 million (H1 2018: £53.2m).
Lavery said: “Whilst the current economic environment remains uncertain, we are making good progress and remain well placed to accelerate the group’s growth as a result of our robust underlying business model and enhanced franchised portfolio.
“Based on the results of the first half and the March performance, the Board expects that performance for the full financial year will be ahead of current market expectations.”