Final results for the 12 months ended 28 February 2018
Robert commenting on the results
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
Unaudited interim results for the six months ended 31 August 2018
Strong balance sheet to drive growth and take advantage of tougher trading environment