Cambria results positive, but warns on chip shortage
05 May 2021
Cambria has reported a rise in underlying profit for the first six months of its financial year to 28 February 2021, but has warned that alongside Covid-19 headwinds the global chip shortage was already impacting supply to both the new and used car markets.
In a pre-close statement Cambria had already reported it was trading ahead of the same period last year for the first five months of its financial year.
In the six months to 28 February, the group saw a 16.0% drop in revenue to £254.7 million however, underlying profit before tax was up 55.5% at £9.8m. Underlying net margin was up to 3.83% against 2.07% last year.
Cambria also reported that “units of new vehicle sales reduced by 16.6%, as anticipated, with an 8.8% reduction in average profit per unit” while used car sales were “down 30.8%; partially offset by a 18.2% improvement in average profit per unit”.
In its results statement the group reported that while in the past six months showrooms were closed for 82 days and “the new car order bank entering March was behind the previous year”, the group delivered “a similar number of new cars year on year”.
It added: “There is now a global semiconductor shortage that is impacting the production of cars and vans with temporary factory closures at a number of the vehicle manufacturers. These closures are having an impact on vehicle supply into both the retail and fleet new car and van markets which in turn has had an impact on the liquidity of supply into the used car market.
Cheif executive Mark Lavery added: “The industry continues to face headwinds in relation to the significant changes in technology and more recently in relation to new car product supply due to the global shortage of microchips and semi-conductors, which could continue for some time and may have a material impact on the new car market.”
In January the group also formed a new flexible mobility business called SOGO Mobility “a multi-channel vehicle ownership operator that provides a range of standard vehicle leasing, flexi-lease and subscription based products, delivering access to a full range of cars and vans across a number of brands that the group does not hold the franchise for”.
Meanwhile, Cambria did not offer any additional comment on the possible management buyout being led by Mr Lavery.
Mr Lavery plus finance director James Mullins and managing director Tim Duckers have been given until 17 May to announce a “firm intention to make an offer” for the business. The offer would be at 80 pence per share, valuing the company at £80 million.
Mr Lavery already controls 40% of Cambria, while Mr Mullins has 2.5%.
- Revenue reduced by 16.0% to £254.7m (H1 2020: £303.1m)
- Underlying profit before tax up 55.5% at £9.8m (H1 2020: £6.3m)
- Underlying earnings per share increased 52.4% to 7.79p (H1 2020: 5.11p)
- Underlying net profit margin of 3.83% (H1 2020: 2.07%)
- Balance sheet with net assets of £79.5m (H1 2020: £68.5m)
- Net debt position as at 28 February 2021 of £5.6m (H1 2020: £6.0m)
- Rolling 12 month return on equity* of 15.82% (H1 2020: 15.85%)
- As previously signalled, interim dividend suspended in light of COVID 19 impact (H1 2020: Nil)
- Units of new vehicle sales reduced by 16.6%, as anticipated, with an 8.8% reduction in average profit per unit
- Units of used vehicle sales down 30.8%; partially offset by a 18.2% improvement in average profit per unit
- Aftersales revenue decreased by 12.7% but with improvement in gross profit
- The cost reduction measures taken during the last financial year have enabled the Group to be leaner and more agile despite the impact on volumes as a result of COVID
- Set up SOGO Mobility Limited as a provider of flexible leasing solutions for corporates and individuals