One statistic stands out in Cambria Automobiles' (CAMB) excellent set of full-year results: the average return on investment for a used car in the year to August was 137 per cent. That's up from the already impressive previous highs of 119 in 2013 and 122 per cent in 2014, and almost double the current industry average of 76.5 per cent.
Chief executive Mark Lavery believes there is further to go. Cambria's marketing strategy - internally dubbed "velocity" - is focused on reaching prospective customers more efficiently and bringing average stock days, the amount of time it takes for each car to be sold, down to 20. The industry average is 55. The strategy's success has already helped cash flows, moving Cambria to a net cash position by August: though a new £37m debt facility has been agreed to support further dealership acquisitions.
Dealerships already picked up help buoy new car volumes. And while the consistent growth in new car registrations since 2011 in the UK may be starting to plateau, Cambria expects the market to remain robust. Mr Lavery also reports that the VW emissions scandal has so far had no effect on car sales, with results this year "substantially ahead of the comparable period".
Brokerage N+1 Singer forecasts adjusted pre-tax profit of £9m and EPS of 7.1p in the year to August 2016, up from £7.7m and 6.1p.
CAMBRIA AUTOMBILES (CAMB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 72p | MARKET VALUE: | £71.5m | |
| TOUCH: | 70-73p | 12-MONTH HIGH: | 75p | LOW: 46p |
| DIVIDEND YIELD: | 1.0% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 34p* | NET CASH: | £1.0m | |
| Year to 31 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 373 | 4.7 | 3.5 | 0.30 |
| 2012 | 353 | 2.7 | 2.3 | 0.30 |
| 2013 | 396 | 4.0 | 3.5 | 0.50 |
| 2014 | 450 | 5.3 | 4.2 | 0.60 |
| 2015 | 524 | 7.7 | 6.0 | 0.75 |
| % change | +16 | +44 | +45 | +25 |
Ex-div: 24 Dec Payment: 21 Jan *Includes intangible assets of £8.4m, or 8.4p a share. | ||||
