Unaudited interim results for the six months ended 28th February 2018
Robert Forrester interview on latest results
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Robert commenting on the Sector issues
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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
(1) Adjusted for exceptional charges, amortisation of intangible assets and share based payments charge.
(2) Core: Dealerships that have traded for two full consecutive financial years.
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
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