Strong balance sheet to drive growth

and take advantage of tougher trading environment

Find out more

Final results for the 12 months ended 28 February 2018

Robert Forrester interview on latest results

Robert commenting on the results

Analyst interview with Mike Allen.
Analyst interview with Mike Allen, Head of Research, Zeus Capital.

Strong balance sheet to drive growth and take advantage of tougher trading environment

  • Adjusted profit before tax of £28.6m (2017: £31.5m) reflective of a tougher trading environment
  • Aftersales and used cars represent 72.3% of gross profit (2017: 71.5%)
  • Exceptional property profits of £3.5m: evidence of value in freehold and long leasehold portfolio
  • Strong balance sheet to fund future growth with net cash of £19.3m (2017: £21.0m) and unutilised bank facilities of £30m, with the potential to add a further £30m
  • Tangible net assets of £174.3m (2017: £156.1m) with tangible net assets per share up 14.9% at 45.4p (2017: 39.5p)
  • Focus on capital allocation: £11.1m returned to shareholders through dividends and share buy backs. Full year dividend up 7.1%
  • Encouraging March and April trading: FY2019 result anticipated to be in line with market expectations

Revenue and margin analysis, Used vehicles

  • Continued growth in average selling prices following new car trend and reflecting premium mix
  • Like-for-like sales revenues up 3.0%
  • 2.2% fall in like-for-like volumes in H2 reflecting wider market decline
  • Recovery in Gross profit per unit and margin in H2
  • New car supply constraints in volume sector reducing ‘nearly new’ volumes: remain high in premium sector
  • Strong customer recommendation rates of 97%: lead indicator for customer retention

Movement in net cash, positive move in second half

  • H1 cash outflows and increased used vehicle stock and VAT flows
  • H2 working capital inflows with partial VAT reversal
  • Management of capital expenditure

Investing to support future cash growth

  • Significant period of investment in dealership capacity and standards including Jaguar Land Rover and Mercedes-Benz
  • Some deferral of projects from FY2018 into FY2019
  • Most major projects expected to be completed by February 2019 after which investment levels will decline, improving free cashflow

Shareholder returns, 8th consecutive year of dividend growth

  • Dividend increased by 7.1% to 1.50p per share (2017: 1.40p)
  • Four times dividend cover
  • £7.9m of share buy-backs performed at average of 43.8p per share to date: 4.53% of issued share capital repurchased to date
  • AGM approvals to be renewed for future buy-backs
  • Focus on returns and capital allocation: anticipate returning to strong free cashflows

Results Past and Present

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