Transcript Slide 1

James Mullins
Finance Director
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Contents
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Background and experiences
Developing Cambria
The FD role and business complexity
Driving Cambria
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James Mullins – CV
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Manchester University, BA in Accounting and Finance
Chartered Accountant (ACA) in 2001
Joint Insolvency Examination Board (JIEB) exams in 2005
8 years Grant Thornton in the automotive service team. Including Audit,
CF, Restructuring, Secondment at FCE
 Cambria May 2007 to date
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Experiences and lessons learned
 Audit – learning the trade, entrepreneurs, development, controls
 Corporate Finance – business plans, cash flow modelling, raising finance, stakeholder
management, advisory, due diligence, disposals, acquisitions, MBO’s
 Captive Finance house – secured lending, external stakeholders views on businesses,
internal workings at OEM
 Restructuring – cashflow, cost reduction, banking covenants, options assessment
 Stakeholder advisory – managing agendas and personalities, presenting options and
recommendations
 Accelerated M&A – value preservation, risk management, stakeholder management
 Insolvency – security structures and pecking order, technical requirements, mechanics of
insolvency, risks of buying businesses from insolvency
 Growing and developing a business – Acquisition, Integration, Operation
 AIM listing - Equity markets, process and perspectives
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Developing Cambria
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 27 Dealerships
 42 Franchises
 17 Brand partners
 9 Acquisitions completed
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Our Strategy
 To establish geographic regions with Primary Manufacturer Brand Partners
representing minimum of three, maximum of 10 locations with the
exception of ultra luxury partners
 To grow organically through brand extension and self-financed acquisition
to create a £1 billion turnover Group
 Regional structure with stand alone autonomous dealerships able to make
locally based entrepreneurial decisions - no Head Office
 Each region to have the capacity to be developed into £200m turnover
business in the medium term
 Balanced brand portfolio. Currently: Volume 55%; Premium and Luxury
40%; Motorcycle 5%
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Group development July 2006 – April 2013
Jul-06
Aug-07
Dec-07
Jan-08
August 08September 09
Oct-09
Dec-09
Feb-10
Mar-11
September 11March 12
Jan-13
Acquisition of
Swindon
Acquisition of
Thoranmart Ltd
Acquisition of
Summit Auto
Group
Acquisition of 4
dealerships from
Insolvency
Addition of
franchises
Acquisition of 4
dealerships from
Insolvency
Acquisition of 1
dealership from
Insolvency
Acquisition of
D&F Trading Ltd
Addition of 1 Site
and 2 franchises
Addition of 1 Site
and 2 franchises
Addition of 1 Site
and 3 franchises
3 Franchises
2 Locations
1 Franchise
1 Location
15 Franchises
11 Locations
4 Franchises
4 Locations
4 Franchises
0 Additional sites
4 Franchises
4 Locations
2 Franchises
1 Location
4 Franchises
2 Locations
2 Franchises
1 Location
2 Franchises
1 Location
3 Franchises
1 Location
Combined Losses pre acquisition c.£9.9m
Total Invested in acquisitions at completion inc property £34.5m
Total Goodwill paid £346k
Total Share Capital raised £10.8m
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Buy-and-Build
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Buy-and-Build
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Buy-and-Build
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Buy-and-Build
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Driving Cambria
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Role of the FD
HR
IT
Property
Legal
Company
Secretary
Risk
Management
Financial
Control and
reporting
Banking and
financing
relationships
Board of
Directors
Business
Development
Shareholders
Other
stakeholders
Professional
Advisors
Our Strategy
 To establish geographic regions with Primary Manufacturer Brand Partners
representing minimum of three, maximum of 10 locations with the
exception of ultra luxury partners
 To grow organically through brand extension and self-financed acquisition
to create a £1 billion turnover Group
 Regional structure with stand alone autonomous dealerships able
to make locally based entrepreneurial decisions - no Head Office
 Each region to have the capacity to be developed into £200m turnover
business in the medium term
 Balanced brand portfolio. Currently: Volume 55%; Premium and Luxury
40%; Motorcycle 5%
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Complexity of the Business model – Maximising revenue streams
Bodyshop
Service
Warranty
Finance
and
Insurance
Used Car
Sales
New Car
Sales
Parts Retail
Parts Trade
Fleet Sales
Commercial
Sales
Motability
Complexity of the Business model – Control of the Working Capital
Car Fleet
Debtors
Manufacturer
Debtors
Finance
Debtors
Demonstrator
Stock
Used Car
Stock
New Car
Stock
Parts Stock
Returns to
supplier
Parts Trade
Debtors
Service
Warranty
Debtors
Service Fleet
Debtors
Bodyshop
Debtors
Complexity of the Business model – Complying with Regulation
HSE
FSA
Trading
Standards
Employment
Law
Optimising the return – “The ingredients”
Group Reporting
Operational
Reviews
A Daily
Framework
On-site Trading
Reviews
Industry Leading
Tools
An
Entrepreneurial
Leader
Changing
Behaviour
Optimal
Return
Communication
The Cambria ‘Tool Box’
Sales
Market Tracker
I – Control
After-sales
Cambria LCS
BCA Auction View
C It Now
EVHC
Cambria Web Sites
Postcode tracker
BDM Voice
Contact At Once
Social Media
Electronic Clocking
Enquiry Builder
Guest Connect
Service Plans
BDM Voice
F&I Internet Tracker
1 Link
Cambria Academy
Marketing Delivery
Group F&I Deals
Group Supplier Deals
Daily Processes
Daily Processes
Group Control - Local Contact Strategy
TABLE REMOVED FOR CONFIDENTIALITY
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Group Control - Vehicles displayed on the web
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Group Control - Enquiries
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Group Control - Sales DOC
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Group Control - After-sales DOC
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Group Control - Vehicle Stock Control
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Used car stock ROI
Days in Stock prior
to sale
Gross profit per
unit
1 to 30 days
£894
31 to 60 days
£707
61 to 90 days
£258
Over 90 days
(£78)
Days in Stock prior
to sale
Annualised return
on investment
1 to 30 days
226%
31 to 60 days
62%
61 to 90 days
13%
Over 90 days
-2%
Source: 2013 AM franchised dealer report
Average dealer 85% ROI
Top performing dealers 150% ROI
Cambria Group 120%
Features of best performers:
 Used cars = investment
 Plan for the life of the car
 in line with stocking matrix - ROI
 Speculative cars are restricted
 Stocking time limits adhered to
Highest ROI cars
 <30 days in stock
 Under £5k
 Over 5 years old
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Monthly Operations Reviews
General
Management
Sales
Management
Service
Management
Parts
Management
Business
Management
Branch
Financial
Controllers
On-site Operational Reviews
Service Department
Local Contact Strategy review
Technician monthly performance - Labour Analysis and review documents
EVHC - Has every vehicle had a VHC
Service Plan Performance
Manufacturer CS program results by individual SA
Recovery Rate Trackers
Warranty - 3 jobcard review, evidence of self audit in the month
Future booking work mix
10 job card individual recovery review
1 Link Performance stats month and YTD (volume, response times and uninvoiced)
Marketing offers - current and planned - Local Independants
Data Quality
Parts Department
Performance vs Manufacturer contract
Stock holding ageing and profile (net movement on prior review)
Check PDR process integrity inc awaiting credit
Surcharge stock review
10 line stock check, evidence of perpetual checks ongoing
Finance and Admin
WEEKLY STOCKS AND DEBTORS REVIEW
Current month forecast
Review minutes of debt meetings
Check banking
Vehicle stock check reconciliation
Health and Safety
Review most recent report from Marcus Smith
Changing Behaviour – Pay Plans
Sales
Associates
Management
Pay
Plans
Service Frontend team
Technicians
Changing Behaviour - Measuring Technician Performance
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 Key Themes for developing the existing
business
– Playing the margins
– Return on investment
– Simple things every day
“Aggregation of Marginal Gains”
“...you can’t make a 100% improvement in 1 area but you can make a
1% improvement in 1000 areas...”
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8 potential steps to 2% aspiration
2% ROS
8
7
0.12
0.27
0.83
6
1.24
5
0.15
4
0.28
0.43
7.28
0.86
3
2
3.1
1
0
Underlying
PBT 2012
New cars margin
recovery
CV and fleet
Used
Volumes to Advertising
previous year
per unit
alignment
Used unit
volumes
Used F&I
Service
Tyre and Oil Parts Margin Aspirational
penetration recovery rate
margin
management Future PBT
management
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Summary
 FD role is multi-faceted, have to be able to wear a number of hats
 Group growth has been delivered with structure albeit opportunistic
 Fire power available to continue adding single and multiple dealerships of
varying size
 Controlling the business is a daily affair in order that it can be driven
 Aggregation of Marginal Gains mean that there are still opportunities for
the enhancement of the existing business
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James Mullins
Finance Director
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