1 March 2017 – trading update
The automotive retailer has issued a trading update for the year to 28 February confirming that results are expected to be in line with expectations, with increases being seen in both revenues and profits. Although 2016 was a record for UK new car sales, it is expected that the current year will see a decline as the effects of the fall in sterling post the EU referendum are felt. Nevertheless, a strong new car market in relative terms is expected. The company has not been immune from this and new car sales at the group are softening. However, the group has seen considerable growth in its used car business, whilst the high margin aftersales business has also performed strongly with over 100,000 customers now paying monthly for the group’s three year service plans. The group has a strong balance sheet and pre-tax profits for the year just ended are expected to be £31.1m for earnings per share of 6.1p. A p/e ratio of just 7.8x is clearly not expensive and with the share price having fallen from last year’s high of 78p we believe the shares are a BUY.