Full year results for the 12 months ended 28th February 2019
Robert Forrester interview on the results
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Analyst interview with Mike Allen, Head of Research, Zeus Capital
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Financial highlights
- Profit before tax of £25.3m (2018: £30.4m)
- Adjusted profit before tax of £23.7m ahead of market expectations (2018: £28.6m)
- Full year dividend of 1.6p per share, up 6.7% (2018: 1.5p per share)
- VAT income of £3.1m, in addition to Adjusted PBT, received following HMRC clarification of finance deposit allowance treatment
- Excellent cash conversion: Free Cash Flow of £21.2m delivered in the year (2018: £10.7m)
(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.
Strategy
- Strong management and financial position enables growth of franchised businesses with major Manufacturer partners to deliver growth in value
- Leads the sector in on-line capability for omni-channel retailing. On-line retailing capability developed in used cars, parts and vans
- Delivery of market beating used car sales growth through use of technology in stock management and vehicle pricing together with cost-effective digital and TV marketing
- Growing high margin service revenues through expanded capacity, high penetration of retention products such as service plans and delivery of outstanding customer experiences
- Strong portfolio management including divestment of sub-scale and underperforming outlets/properties generating cash and reducing cost structures
- Continuing value enhancing acquisitions
Operational
- £186m (6.7%) growth in revenues to £3bn, with like-for-like revenue growth of 5.1%
- Excellent aftersales performance with like-for-like revenue growth of 7.0% delivering a 6.4% growth in gross profit
- Like-for-like used vehicle revenue growth of 11.6% delivering £2.5m additional gross profit
- New retail volumes stable and ahead of the market trends
Capital Structure
- Adjusted Net Cash of £22.9m (2018: £32.1m)
- Strong balance sheet to fund future growth: tangible net assets per share of 44.9p reflective of extensive freehold property base
- Major capital expenditure programme now largely complete aiding future Free Cash Flow generation
- Used car stocking funding utilised of £23.2m (cover of 4.6 times used car stock value) (2018: £12.8m). Substantially lower than industry peer group reflecting resilient balance sheet
- £3.6m of shares bought back in FY19 together with £5.7m of dividend payments
- Share Buyback Programme recommenced on this announcement with £3m allocated
Outlook
- Group has traded in line with management's expectations in March and April 2019 with trading profit expected to be in line with prior year period
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