# Cambria Automobiles acquire Aston Martin and Rolls-Royce dealerships

- Link: https://www.directorstalkinterviews.com/cambria-automobiles-acquire-aston-martin-and-rolls-royce-dealerships/412803390
- Published: 2020-01-21T07:47:29+00:00
- Author: Amilia Stone

**Cambria Automobiles** (LON:CAMB) has announced this morning the successful acquisition
of one Aston Martin franchise and one Rolls-Royce Motor Cars franchise in Edinburgh
from the administrator of Leven Cars Group Limited. The total cash consideration,
which includes one freehold and one leasehold property along with certain fixed 
assets, is £1.6m and this will be funded from the Group’s existing resources. We
update forecasts to reflect this, with an increase in 2020E revenue of c.2.0% but
no impact to earnings. In 2021E we assume an additional £30m of revenue and a 1.6%
increase to adj. PBT forecasts (1.6% at the EPS level). We remain firmly confident
in Cambria’s ability to continue to execute and outperform the market as it has 
in recent years and see this latest acquisition as further evidence of the group’s
ability to effectively deploy capital and acquire assets at good value.

 * **Acquisition:** Cambria has acquired of one Aston Martin franchise and one Rolls-
   Royce Motor Cars franchise in Edinburgh from the administrator of Leven Cars 
   Group Limited. The total cash consideration, which includes one freehold and 
   one leasehold property along with certain fixed assets, is £1.6m and this will
   be funded from the Group’s existing resources. The consideration includes no 
   goodwill with £1.5m of freehold property and c£0.1m of plant and equipment. The
   franchises represent the only Aston Martin and Rolls Royce dealership in Scotland
   and the group’s first Rolls Royce dealership in the portfolio, expanding the 
   High Luxury Segment offering.

 * **Forecasts:** We update forecasts to reflect this, we increase our 2020E revenue
   forecast by 2.0%, but expect the newly acquired sites to be breakeven in this
   year and have therefore not changed our earnings expectations. In 2021E, we assume
   an additional £30m of revenue, delivering an increase of £0.2m to adj. PBT. Net
   debt, factoring in £1.6m paid for the assets, and our new trading assumptions
   is £11.7m in 2020E (vs £10.1m previously), going to £14.1m, in 2021E (vs £12.6m
   previously) and £9.7m in 2022E (vs £8.4m previously)

 * **Investment view**: We remain confident in the Cambria Automobiles story longer
   term, and believe it remains well positioned to deliver £1bn+ of revenue over
   the medium term. As we are seeing across the sector at present, near term valuation
   multiples are depressed, and the current market capitalisation of the Group remains
   at odds with the >£80m invested freehold asset base. The growth in the High Luxury
   Segment with the addition of Rolls Royce looks exciting. Cambria trades at a 
   discount on a P/E basis to its direct UK peer group, in a sector that looks oversold.

Share on: