7 May 2020 – trading update

A detailed trading update has been provided by the automotive retailer.  Following the introduction of the UK Government’s social distancing restrictions which came into effect on 23 March, all retail vehicle sales and aftersales operations were temporarily closed from the close of business on 24 March, with vehicle sales deliveries suspended.  On-line and telephone sales operations have continued and an order bank had been built up since 25 March, comprising 825 retail vehicle orders and 749 fleet and commercial orders as at the date of the announcement on 7 May.  The majority of the dealership aftersales operations were reopened in late March and have been providing vital service and repair services to key workers, vehicles undertaking essential activities and vulnerable customers who rely on their cars.  Van repairs have also represented a significant level of work undertaken.  Costs are being managed very closely with the furlough scheme being used to temporarily layoff approximately 80% of staff.   Careful control of site closures has delivered other cost savings, including an approximate 60% saving on dealership energy costs versus the month prior to closure.  Adjusted net debt, excluding used vehicle stocking loans, was £2.8m at 29 February 2020 and a further £10m of the revolving credit facility was drawn in March.  Although the immediate future is uncertain the company is well managed and should ride out the current difficult situation.  We keep our BUY rating.