Cambria Automobiles Share Discussion Threads

[mortimer7] 04/9/2015 09:24

With todays registration figures for August I have the new car market data for the 12 month period corresponding to CAMBs financial year Sept 14 - Aug 15.

Total New Car regns were 2578468, vs 2405464 for the prior year, an increase of 7.2%.

In their half year interims CAMB stated "New vehicle sales up 15.6%".
It will be interesting to see how far ahead of the market they have performed when we get their update shortly.

[mortimer7] 04/9/2015 09:11

SMMT figures out for August this morning:
UK new car market up again in August, marking 42nd consecutive month of growth
Registrations increase 9.6% in August to 79,060 units.
Year to date new car market up 6.7% to 1,634,369 units.
Gains made across private, fleet and business market segments.

[effortless cool] 03/9/2015 12:53

Thanks, Mortimer7. Not a terribly exciting read across for CAMB, based on those take-out ratios.

[mortimer7] 03/9/2015 09:55

hxxp://www.am-online.com/news/acquisitions-and-deals/2015/09/03/lookers-expands-with-takeover-of-fellow-am100-car-dealer-benfield-motor-group

Lookers Group have bought Benfield Motor Groups 30 dealerships for £87.5million.
Zeus Capital report the transaction included goodwill of £33million.

In comparison to CAMB at 21st, Benfield were 15th largest dealership in UK last year.

For the year ended 31 December 2014 Benfield reported revenue of £699.7m, PBT of £7m. The company had gross assets of £154.6m and net assets of £55m.

[mortimer7] 02/9/2015 11:33

We're due a trading update early in september following the fin. y/e.

[davidosh] 07/8/2015 13:49

Mortimer7....All very valid and excellent points.

[mortimer7] 07/8/2015 09:04

New Car Sales always get the headlines, but of the 3 key revenue streams that contributes least to gross profit. By way of illustration:
GP for Six months ended 28 February 2015
New Car £7.2m Used Car £9.9m Aftersales £12.4m. Total £29.5m.

Also, as the flow through of revenue to aftersales is always time delayed, even when new car sales do stop increasing YoY there should still be increased aftersales revenue for a couple of years.

[buffythebuffoon] 07/8/2015 01:35

Just to put things in perspective, we are talking about a weakening year on year increase. Could have been better, but could have been far worse.

With new registrations growing, there are worse sectors to be in.

Buffy

[effortless cool] 06/8/2015 22:37

Disappointing new car registration stats today, being the third lowest monthly year-on-year increase since the start of 2013 (31 months).

This pretty much confirms the weakening upwards trend. I have amended my model accordingly, and forecast 77,725 for August 2015.

[jaf111] 06/8/2015 21:22

PDG results well received with nearly 20% increase in share price following increase in profits and earnings per share of 23%.
Am expecting CAMB to continue to out-perform PDG....hopefully next month's trading update will point to a minimum 50% increase in earnings per share putting the shares on a PE of around 10.
Both PDG and CAMB's share price have risen by a similar amount (around one third) over the past year.
I have continued to increase my position in CAMB but no longer hold PDG. (I also have smaller positions in LOOK, VTU and CFYN)

[mortimer7] 06/8/2015 15:05

The listed dealer groups are out-performing the rest of the car retailing sector, according to Mike Allen, director of Zeus Capital, talking at the 2015 ASE/Motor Trader Financial Conference.
“There is a slight dichotomy between industry profitability and plc profitability. Industry profitability appears to be falling, particularly in terms of self-registrations and margin pressure, but generally the listed groups are outperforming the market with their tight control on costs. They’re generating good cash-flow at the moment,” he said.
Allen said the listed groups are seeing profitability uplifts in both new and used sales.
“In the new car market we are seeing margin pressure but the volume uplift is more than offsetting that at the moment so we are seeing absolute profit growth.
“Used performance has been very good in the context of good price control and that is testament to the processes the dealer groups have put in place in the new car.”

[mortimer7] 06/8/2015 09:35

This mornings figures from SMMT show new car registrations growing steadily in July with 178,420 cars registered, an uplift of 3.2% on the same month last year. Registrations in 2015 so far have risen 6.5% to surpass 1.5 million.
41st consecutive month of growth.
SMMT Chief Executive, said, “While more moderate than in recent months, July’s rise in new car registrations is good news, and indicative of what we expect for the remainder of 2015".

[davidosh] 04/8/2015 11:12

The July SMMT figures will be out tomorrow I think as well.

[jaf111] 04/8/2015 07:33

Strong interims from Pendragon this morning bodes well for whole sector......trading statement from CAM due early next month.

[glaws2] 14/7/2015 10:06

Looks like they will have to upgrade their IT infrastructure sooner rather than later ....

"Oxford-based online solutions provider, Ebbon-Dacs, is strengthening its market-leading position in the fleet connectivity market with new investment and resources, while at the same time following a planned and phased withdrawal from the retail dealer management systems’ (DMS) arena"

Press release 1 May 2015

[ganthorpe] 14/7/2015 09:41

All the large motor dealers make good use of swing doors. I tend to change my car about every two years with visits regularly and car sales staff don't last long thses days it seems.Dealers are under intense pressure from mamufacturers to move more and more metal with UK sales far better than mainland Europe.
The last decent salesman I dealt with had his review having sold over his targets and was warned that he was not trying hard enough to sell the fancy "add ons"that boost their margins and unlikely to be useful to the customer.The other day I rang up to be told "no-one of that name works here".
This was not CAMB or VTU but one of the biggest BMW PLC dealerships .
So CAMB are probably no worse that average.

[effortless cool] 13/7/2015 22:40

Ethelwalch,

Thanks for those interesting insights. You clearly know the company well and it is great to get a feel for the business beyond the numbers and the publicly available information.

The lack of any Head Office shows a commendable approach to economising, but I wonder if it is sustainable as the company grows, e.g. centralised Finance and IT functions would seem to make sense.

I have added a link to your post in the header.

[ethelwalch] 13/7/2015 22:24

Nice new thread. I thought I might share a little re. the thread header and the glassdoor review.

Cambria has no head office. Main Board and particularly Ops Board members are mobile. If they need a desk they will pitch up at a dealership.
The monthly Ops reviews are held in hotel meeting rooms. There can be robust language but this is the motor trade and it's usually directed at people that waffle and/or choose to test Lavery's patience. He is a formidable, no nonsense kind of chap.

Lavery transferred 35M of his 40M holding to Mrs Lavery a few years back.

Cambria pay reasonably well and expect results.

Lavery's current horizon is £1B turnover and an share price well in excess of 100p. What he will do at that point I don't know. Some speculate sell, I don't thinks so. He has said that he doesn't want Cambria to be Pendragon sized and that he does not want to expand north of the Lancs dealerships.

Cambria broke from their 'buy and build' strategy of acquiring failing businesses and turning them around during the bad times when they bought the first LR dealership last year. A modification to strategy reflecting the improved UK economy. That purchase also saw an end to the policy of not paying goodwill with acquisitions.

The 'Four Pillars' pre-dates Cambria's listing and subsequent acceleration, and was always a paper exercise. Lavery's fifth pillar for underperformance however, was and remains very real.

Lavery can be lavish in social situations with rewarded staff members; £14k spent at one rugby match at Twickenham, helicopters at Le Mans, Park Lane balls.

Cambria's IT infrastructure is moderate at best. The central Dealer Management System, Ebbon Dacs is occasionally buggy, cumbersome, time consuming and difficult to learn and use. Cambria are the only dealer chain I am aware of that use Ebbon Dacs. The accountants rate it however.
The company website Motorparks.co.uk is the height of tack. Predictably, Jaguar and Volvo insisted on standalone sites. (Grange.co.uk and dovesvolvo.com). At some point Ebbon Dacs will need to be replaced but I believe they hold off on the grounds of cost. When it is replaced I think there will be significant efficiency gains to be had.

Ian Godbold, IT director, takes his cues from the US motor industry and crosses the Atlantic occasionally. He has brought US innovations such as live chat to Cambria well before most of the really big players here and his works produces a disproportionately high amount of incoming leads to the level of stock that Cambria holds (2500-ish cars) when compared to the larger dealer chains.

I would also rate staff morale as moderate. Staff churn at the northern dealerships is quite a bit worse than in the south. I am unsure why this is but note that the volume/premium brand split in the northern and midlands dealerships differ to those in the south.

Almost all of the main and ops board members are from the North of England or Midlands.

James Mullins is a very capable young FD. He compliments Lavery well.

Note the absence of any German brands (excepting the VAG Seat franchise at the original site - Swindon Motorpark) in the Cambria portfolio. A Merc, BMW or VAG franchise would change the game dramatically IMO.

The above is just information with the odd smattering of opinion, make of it what you will. I hold as I have faith in Lavery and Mullins to deliver for themselves and consequently Cambria shareholders.

PS: You won't find very many shysters in the main dealer networks now, the regulation, oversight and admin have weeded them out.

[effortless cool] 13/7/2015 12:32

From my perspective, Mr T has made a very well-timed entrance to the party.

[wynmck] 13/7/2015 12:03

spike is on Simon Thompson IC online tip

[effortless cool] 09/7/2015 22:11

Further to davidosh's post 4,

SMMT new car registrations have shown growth of 10% per annum over the last three years. This compares with my estimate of 16% achieved by CAMB over the same period, after adjusting for acquisitions.

The SMMT trend has been quite consistent, although has started to tail off slightly over recent months.

My forecast for July registrations is 197,648 (approximately).

[4spiel] 09/7/2015 13:36

Wish you good luck. I am confident though that results this year will be robust ! the period up to the election caused hesitancy.

[effortless cool] 09/7/2015 13:24

4spiel,

Only one transaction is showing on ADVFN trades, and that is in the "buy" column. The other one went through ISDX, so does not show.

[4spiel] 09/7/2015 13:18

Why are your 'BUYS' showing as sells ? !!!! Or is I just the 'system' ! having bought small at 25p not bothered . No China or Grexit issues here.

[effortless cool] 09/7/2015 11:07

I have added another £40k worth on today's weakness.

Now fully invested here - just going to sit and wait.