Full year results for the 12 months ended 29th February 2016
Interview with Robert commenting on the results
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Analyst interview with Mike Allen, Head of Research, Zeus Capital
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Continued growth in all areas of the business delivering record revenues and profits
- Adjusted* profit before tax up 24.5% to £27.4m
- Record profit before tax rose 23.8% to £26.0m from £21m
- Revenue up 16.8% to £2.42bn
- Very strong cash generated from operations of £65.8m from £26.1m
- Earnings per share up 24.4% to 6.06p from 4.87p
- Adjusted* operating profit up 26%
- Adjusted* earnings per share growth of 25.4%
- Period end net cash of 23.1m from 15.7m
- Final dividend up 21.4% to 0.85p per share from 0.70p per share: to be paid in July 2016
(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.
Operational Highlights
- Fourth consecutive year of growth in revenues and profits
- Like-for-like service revenues rose 6.5%: sixth consecutive year of growth with 90,000 live service plans in place
- Continued improvement in aftersales performance - gross margins increased to 44.8% (2015: 43.5%)
- New retail vehicle like-for-like volume growth of 4.0%
- Used vehicle like-for-like volume growth of 8.0%
- Over 70,000 used vehicles sold during the year for the first time: total volume growth up 13.0%
- Stable overall gross margins despite increasing vehicle sales mix, showing underlying business improvements
- Significant recruitment into operational management team to support future growth
Strong balance sheet and funds available for expansion
- Net cash of £15.7m (2014: £31.4m)
- Significant unutilised bank facilities refinanced in March 2015 provide substantial resources of £40m for further expansion opportunities
- Balance sheet underpinned by freehold and long leasehold property portfolio of £126.6m (2014: £105.6m)
- Net assets of £179.6m (2014: £163.4m):net assets per share of 52.7p (2014: 48.5p)
Current Trading and Outlook
- The Group has traded ahead of the current year financial plan and the prior year in March and April 2016 ("the post year-end period").
- In the post year-end period, aftersales margins rose from 45.2% to 46.7% with like-for-like revenue increases. Service like-for-like revenues rose 7.0% and continued to benefit from the successful customer retention initiatives being executed by the Group.
- The post year-end period includes March, which remains the most significant month for the profitability of UK automotive retail.
- The Group's like-for-like used vehicle retail volumes were up 5.9% in the post year-end period continuing the sustained, long term growth in performance.
- Given trading in March and April 2016 and the encouraging improvements we are seeing in the acquired businesses, the Board remains confident about the Group's prospects for the current year.
- Group service revenues have continued to grow 7.2% on a like-for-like basis in March and April
- Seeing consistent profit growth from improving recently acquired dealerships
Group well positioned for further growth
- Current trading ahead of prior year with strong operational management team in place
- Strong aftersales dimension with growing resilience due to focus on retention strategies
- Portfolio contains dealerships with significant potential to enhance margins
- Increasing number of premium franchise outlets providing diversification benefits higher profiability
- Group marketing initiatives driving market share improvements: new Chief Marketing Officer started 1 March 2016; further transactions in progress
- Strong property-backed balance sheet with conservative debt appetite
- Capital raised via placing being swiftly deployed as anticipated: Leeds Jaguar acquisition 2 May 2016; further transactions in progress
- Plans to refinance borrowing facilities on a long-term basis being progressed
- Board's confidence in future prospects reflected in 23.8% increase in full year dividend
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