Cambria Automobiles’ transition towards luxury car sales with the opening of new Bentley, Lamborghini and McLaren showrooms has helped it to a 37.4% increase in profit before tax in its latest annual financial results.
As group turnover rose by 4.4% to £657.8 million (2018: £630m) during the period to August 31, 2019, profit-before tax rose by 37.4% to £12.5m (2018: £9.1m) with the help of a 40.3% rise in average profit from each vehicle sale.
“Remembering that this time last year we were telling people that we'd be shutting businesses, taking on new franchises and moving into the HLS space it's nice to reflect on that process in light of these results,” said Cambria chief executive Mark Lavery.
Lavery said that the strategic refranchising and property development activity that started during the previous financial year had "delivered a positive impact despite the significant headwinds in the industry and broader economy", but he added: "In truth, we aren't visionaries. Our conversations started with Bentley in 2011 and with Lamborghini in 2010.
"We're very pleased with how things have worked out, but it hasn't come without a degree of pain and uncertainty along the way.”
While much of Cambria’s shift into supercar sales took place in its 2017/18 financial year, November 2018 saw the group open its second Lamborghini franchise (Tunbridge Wells), a move into its new Hatfield Aston Martin and McLaren dealership and occupation of the newly completed Hatfield Jaguar Land Rover (JLR) Arch Concept dealership.
The changes haven’t been confined to the premium and luxury sectors, however.
June brought the opening of Vauxhall dealership alongside its recently-opened Peugeot showroom in Warrington, while April’s opening of a new Suzuki dealership in Maidstone was followed a month later by the opening of Citroen dealership in Oldham. Those openings followed the group's decision to pare-back its representation of FCA Group brands last summer.
Cambria also acquired land in Brentwood for development of dealership facilities during May and now has plans to relocate its Lamborghini and Bentley dealerships from Chelmsford, along with the creation of a new JLR facility and a new Aston Martin franchise.
Lavery said: "There are also plans for another brand that have yet to be settled."
Despite the continued network developments and a £17m investment in freehold property, the group reported in its annual results statement today (November 20) that it had retained a strong balance sheet – net assets £65.6m (2017/18: £56.6m) – and reduced net debt to £3.8m (2018: £5.5m).
During the reported period Cambria reported that its new car sales to retail customers had reduced 11.8% (like-for-like down 8.1%), while its lower margin fleet and commercial sales reduced 36.3% and 59.8%, respectively, as overall unit sales of new vehicles reduced by 18% (like-for-like down 15.3%).
New car gross profit increased by £2.7m, however.
Used vehicle sales were down 4.9% (like-for like up 1.4%) – in part due to the closure of its Swindon Motor Park – but this too was offset by an 8.7% (like-for like 7.0%) improvement in profit per unit, it said. Used car gross profit increased by £0.8m.
Aftersales revenues increased by 4.3% (like-for-like increase 5.1%) as gross profit increased by £0.5m.
Lavery said: “Our teams have worked incredibly hard and delivered a strong result at both the revenue and profit levels, which significantly outperformed market expectations.
“Our strong new car profitability, improved used car profit performance, combined with growth in aftersales have all been significant contributors.
“I would like to thank our associates for their contributions throughout the year.
“Trading in the current financial year has started in line with the board’s expectations.
"The board remains confident that Cambria’s resilient business model, enhanced franchise portfolio, focus on delivering a superior Guest experience and financing arrangements leave it well positioned to take advantage of any opportunities that the current economic uncertainty will provide.”