Cambria Automobiles plc (LON:CAMB) has delivered a resilient set of FY results in very turbulent times for the automotive industry at present. Underlying EBIT was within 4% of last year (or 7% if IFRS 16 impact is stripped out) mainly driven by strong cost control and Government support. Cash generation and the balance sheet remains robust, and we continue to see Cambria as a strong survivor, albeit with more turbulent times ahead as we head into 2021 and beyond.
- Final results: This was very much a year of two halves with H1 strong as previously flagged to the end of February, with H2 heavily impacted by COVID-19. H1 PBT was £6.3m vs. £5.5m last year as announced in May, with implied H2 PBT of £4.9m vs. £6.8m last year. Revenues were -20.3% YOY with adjusted PBT -9.8% to £11.1m. The key observation we would make is underlying EBIT being just 4% down YOY or 7% fully adjusted for IFRS 16 driven by the recovery that took place from June as the UK came out of the first lockdown as well as strong cost control throughout the business. Cash generation was robust, and the balance sheet remains strong, with underlying ROE at 13% still ahead of its cost of capital.
- Key drivers: As expected, all parts of the business fell in profit terms YOY, with significant cost control measures and Government stimulus that was put in place helping to preserve PBT levels being within 10% of last year. New vehicle sales were -25.2% with profit per unit increasing by 2.7% due to a favourable mix. F&I penetration remained high at 80.2% during the year. Used car units were -20.9% YOY, albeit the profit per unit +7.7% helped to minimise the gross profit YOY reduction. The drop in aftersales revenue was less severe at -14.7% with gross margins here remaining robust at 39.5%.
- Outlook: The outlook continues to be cautious with a number of issues facing Cambria and the wider industry at present. Trading in September and October was ahead of last year, but turned negative again once the second lockdown commenced. There are many major uncertainties facing the industry at present including Brexit, Emissions and general economic issues namely anticipated rising levels of unemployment.
- Investment view: We continue to see Cambria Automobiles as one of the survivors in an industry where significant change, disruption and potentially consolidation is anticipated. The Group is well managed and has a strong balance sheet, and we believe its performance to date has been robust in tough and unprecedented trading conditions.
