Cambria Automobiles plc Annual Report 2010

FY2010 Annual Report · Cambria Automobiles plc
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Directors’ report and ﬁ nancial statements 
for the year ended 31 August 2010
Registered number 05754547

Contents

Chairman’s Statement ............................................................. 4

Operating and Financial Review ............................................. 7

Directors’ report ......................................................................16

Statement of directors’ responsibilities in respect 
of the Directors’ report and the ﬁ nancial statements ..........18

Independent auditors’ report to the 
members of Cambria Automobiles plc ..................................19

Consolidated Statement of comprehensive income ............ 20

Consolidated Statement of changes in equity ....................... 21

Consolidated Statement of ﬁ nancial position ..................... 22

Consolidated Cash Flow Statement .......................................23

Notes ....................................................................................... 24

Company Balance Sheet ........................................................ 56

Company Reconciliation of movements 
in shareholders’ funds ........................................................... 57

Notes ....................................................................................... 58

2

3

Chairman’s Statement

I am pleased to report another record year for Cambria with the Group achieving revenues of £392 million and a proﬁ t before tax prior to the 

deduction  of  non-recurring  listing  and  transaction  costs  of  £4.2  million.  Since  the  formation  of  Cambria  in  2006  when  we  made  our  ﬁ rst 

acquisition, we have built the business into a top 20 UK motor dealership Group. For a signiﬁ cant proportion of this period the UK economy 

has been in recession and it is testament to the quality of the Cambria operating team that they have not only taken advantage of opportunities 

to  acquire  businesses  but  have  signiﬁ cantly  improved  the  operational  performance  of  those  businesses  acquired.  Delivering  operational 

improvement is key to the Board’s objective of providing superior returns on shareholder’s funds.

Cambria was established in 2006 with a plan to build a top 10 UK dealership group through the acquisition of attractive individual or groups 

of dealerships. The attractiveness of an  underperforming  business  is determined  partly  by geography and  manufacturer  brand  but  focuses 

on the opportunity to fundamentally improve the operational performance of the dealership. Such improvements are delivered by our highly 

experienced  management  in  combination  with  the  implementation  of  our  common  operational  approach.  The  Board  has  recruited  an 

exceptional management team who have the skills and experience to deliver the required improvements on both a national and local level. 

Retaining and growing this management team is fundamental to our strategy going forward.

In the year to 31 August 2010 the Group made 3 separate acquisitions adding 10 dealerships generating £31.8 million in revenues during the year 

and £61 million on an annualised basis. The speed of operational transformation varies from business to business but we are conﬁ dent these 

dealerships will contribute positively to the Group in the next ﬁ nancial year and help drive the ﬁ nancial performance of the Group in the future.

The Board has always been mindful of the need to manage Cambria’s ﬁ nances prudently. We have refrained from paying excessive goodwill on 

the acquisitions we have made and total equity raised and invested to date amounts to only £10.8 million. The Group has a strong balance sheet 

which is underpinned by the ownership of freehold properties at a number of the dealerships we operate, together with an overall prudent level 

of debt. We have over the last two very challenging years maintained a high degree of liquidity both through our banking facilities with Lloyds 

Banking Group and our stock ﬁ nance facilities. This liquidity has enabled us to take advantage of acquisition opportunities as they have arisen, 

as well as make operational decisions to maximise proﬁ tability. This dynamic management approach is a key element to ensuring the returns 

we have been able to achieve.

In 2010 Cambria achieved a key milestone when its shares were admitted to trading on AIM in April. The decision was taken by the Board to 

secure admission to AIM in order to raise the public proﬁ le of the Company, facilitate access to development capital in the future (should the 

need arise) and to attract over time a wider shareholder base. We did not raise new funds at the time of the admission as the Board believes it 

has suﬃ  cient capital to continue to expand the Group for the foreseeable future in a manner which enhances shareholder value. Clearly our 

AIM quotation gives us the option of raising share capital to ﬁ nance further acquisitions but the Board will seek only to do this if it believes 

such opportunities are in the best interest of shareholders, and where the transaction transforms the scale of the business. We recognise the 

challenges of having a relatively limited free ﬂ oat and the impact of the 2 year lock in period for many existing shareholders. The Board is 

working on broadening the institutional shareholder base and attracting shareholders who will support the Group in its future development. 

However, the primary goal of the Board is to deliver strong future ﬁ nancial performance based on our business model. We believe this will 

deliver the best shareholder returns.

The UK new car market increased by 18% in the year compared to the previous year. However, the outlook for the next 12 months in the UK 

is at best uncertain. The general concern that the UK economy may suﬀ er a double dip recession over the coming 12 months as Government 

spending cuts take eﬀ ect, has created a very challenging background for the UK dealership sector. The speciﬁ c sector challenges such as the 

expiry of the scrappage scheme, the introduction of a new show room car tax and the impending second increase in VAT in 12 months will 

challenge all operators in the UK. The British consumer is also faced with higher general inﬂ ation in addition to these eﬀ ective price increases 

on new cars. The Board is cognisant of the impact these factors will have and as part of the 2010/2011 budget process implemented a cost review 

programme to ensure the Group is appropriately shaped to continue to grow proﬁ ts. We anticipate more diﬃ  cult trading conditions but believe 

we are well prepared for this environment. Most importantly the Board believes our business model will enable us to continue to be successful 

notwithstanding these operating challenges. The real opportunity for Cambria in such market conditions will be a growing number of attractive 

acquisition opportunities which will arise as other operators struggle with these challenges. The Board is already in discussion with a number 

of parties which may generate appropriate add-on acquisitions and believes that the continuing economic diﬃ  culties may help accelerate the 

growth of Cambria.

The Board recognises the importance of our diﬀ erent stakeholders beyond the Group’s shareholders. Our lending bank Lloyds Banking Group 

and our other credit institutions have continued to support the  Group and in particular have been responsive to our continued acquisition 

programme recognising our strategy of prudent  ﬁ nancial  management. This continued strong support will  be  important  in capitalising on 

future opportunities.

4

Chairman’s Statement (continued)

Our relationship with the manufacturers that we represent is a core pillar of our business approach. The management team is committed to 

developing and maintaining a strong working relationship where Cambria is seen as an eﬀ ective and valued business partner. We were pleased 

to add Mazda, Honda and Triumph as brand partners in the ﬁ nancial year and are currently in discussion with a number of other manufactures 

with a view to representing them in the future.

Finally the Board would like to thank the Cambria associates for their energy and commitment to the Group over the last 12 months. Acquiring 

and integrating businesses generates signiﬁ cant challenges and our associates regularly make exceptional commitments to achieve success for 

the Group. In the last year we welcomed 188 additional personnel and we extend a warm welcome to these new Cambria associates. An important 

goal of the Board is to create a challenging and enjoyable environment where our associates have the opportunity to develop rewarding careers. 

We are conﬁ dent our new associates will embrace this diﬀ erentiated approach within the auto dealership sector and together with our existing 

team help us deliver the Cambria strategy in the future. 

Warren Scott
Non-executive Chairman

6

Operating and Financial Review

Chief Executive’s Review

“  2010  has  been an  important year  for  Cambria with our admission  to trading on the  London  Stock 

Exchange AIM in April.  It is the third year in succession that we have doubled underlying pre-tax proﬁ ts 

and produced a record underlying 22% return on shareholders’ funds.    

We have continued to deliver on our original “buy and build strategy” with the addition of another ten franchised outlets 

from seven diﬀ erent locations.  Cambria has continued to demonstrate its ability to purchase and transform underperforming 

dealerships so as to generate returns for shareholders.   

Cambria  has  an  extremely  strong  balance  sheet  containing  minimal  intangible  assets,  a  strong  freehold/long  leasehold 

portfolio and good liquidity.   In what have been without doubt very challenging economic times, Cambria has demonstrated 

that it continues to drive excellent growth whilst at the same time integrating new businesses into the Group.  

Current trading is resilient and in line with the Board’s expectations. The Board believes that the uncertain economic climate 

will  continue  to  provide  acquisition  opportunities  from  which  Cambria  will  beneﬁ t  and  the  Board  believes  Cambria  has 

suﬃ  cient available cash resource to take advantage of these opportunities ”. 

Operating and Financial Review

Cambria  Automobiles  plc  announces  its  maiden  results  as  a  public  company  for  the  ﬁ nancial  year  ending  31st  August  2010.    Cambria  is  a 

franchised motor retail group that was formed in 2006 and through a buy and build strategy encompassing 7 corporate acquisitions to date, 

has grown to represent 13 diﬀ erent brands from 25 locations with 37 new car and motorcycle franchises.   The Group focuses on acquiring and 

improving under-performing businesses where it believes the best shareholder returns can be achieved. 

Revenue

Underlying EBITDA*

Underlying operating proﬁ t*

Underlying proﬁ t before tax*

Underlying net proﬁ t margin*

EBITDA

Operating proﬁ t

Proﬁ t before tax

Non-recurring listing and transaction costs

Net Assets 

Net proﬁ t margin

Underlying earnings per share*

Earnings per share

* these items are excluding the non-recurring listing and transaction costs of £1.54m

12 months ended 
31-Aug 2010 
£m

12 months ended 
31-Aug 2009 
£m

392.1

6.1

4.7

4.2

255.5

4.6

3.4

2.0

1.06%

0.80%

4.5

3.2

2.6

1.54

16.0

0.66%

3.06p

1.95p

4.6

3.4

2.0

0

14.1 

0.80%

1.61p

1.61p

8

Operating and Financial Review (continued)

I am pleased to announce that for the third year in succession we have doubled our underlying pre tax proﬁ ts (before non-recurring listing and 

transaction costs).  2010 has produced an underlying pre tax proﬁ t of £4.2m against a previous year of £2m.  These results have been achieved in 

a period of signiﬁ cant economic uncertainty.

The  business  has  shown  signiﬁ cant  growth  in  turnover  in  all  departments  from  continuing  operations.    The  acquisitions  have  also  added 

incremental turnover during the course of the year.

Financial Highlights

•  Third successive year that the Group has doubled underlying proﬁ t before tax achieving £4.2m compared with the previous year’s £2.04m

•  Total revenue for the 12 months increased by 53% year on year (like-for-like revenue increase of 41%) to £392.1m from £255.5m in 2009

•  Gross proﬁ t increased 29% year on year, underlying EBITDA increased to £6.1m from £4.6m

•  Underlying earnings per share increased to 3.06p from 1.61p

•  Group net assets at £16.0m under-pinned by £22.5m of freehold and long lease-hold property

•  Robust balance sheet position with only £0.3m of goodwill

•  Net debt reduced to £4.4m from £5.7m in previous year 

•  Net cash inﬂ ow of £3.5m after £5.1m of acquisition spend, £1.4m of capital expenditure and £1.5m of non-recurring listing and transaction costs

•  Underlying return on shareholders’ funds of 21.7% 

Operational Highlights

•  New Car Unit Volumes increased 58% year on year against a market increase of 18% year on year.  37% new car volume increase on a like-for-like basis    

•  Used Car Volumes increased 34% year on year and 19% on a like-for-like basis

•  Service Hours increased 18% year on year and 4% on a like-for-like basis

•  Acquisition of 7 new locations and 10 new franchised outlets

•  Addition of Honda, Mazda and Triumph Motorcycles to the Group’s brand partnerships

•  Continued robust approach to the management of the Group’s working capital and cash generation

Operating Review 

Group Strategy

Since our incorporation in March 2006, we have continued to apply our focused “buy and build” strategy acquiring under-performing motor 

dealership  assets.    Following  any  acquisition,  the  Cambria  management  team  implement  new  ﬁ nancial  controls,  operational  controls  and 

processes in order to rationalise, restructure and develop each individual dealership.  This tailored approach ensures the changes made to each 

dealership are sustainable and create shareholder value through achieving an appropriate contribution for the level of investment. We have 

completed 7 separate transactions since our incorporation, 3 of which were in the period under review. 

The 3 corporate acquisitions in the period have added 4 Mazda, 2 Honda, 3 Triumph motorcycle and 1 Fiat dealerships to the Cambria portfolio, 

the new dealerships operate from 7 diﬀ erent geographical locations.  Pursuant to one of these acquisitions, Cambria acquired 2 further freehold 

properties resulting in Cambria now owning 11 freehold or long leasehold properties out of our total of 25 locations. 

We have a 3 step approach to purchasing a new business – acquisition, integration, operation.      

Acquisition 

When acquiring new businesses we are diligent in ensuring that none of the contractual obligations that are taken on pursuant to the acquisition 

upset the integrity of our balance sheet, this includes ensuring that leases reﬂ ect market value and that any unusual contractual obligations are 

addressed prior to acquisition.   Our Group balance sheet shows that on consolidation we have only £0.3m of goodwill which has been generated 

across the 7 acquisitions.   None of our lease arrangements have any ﬁ xed compound rent reviews, and we do not have any deﬁ ned beneﬁ t 

pension schemes.    

Integration 

The integration process starts with an Associate engagement evening where our senior management present the Cambria “Four Pillar” culture 

change  programme.    After  this  meeting,  the  Group  integration  team  implement  systems,  processes  and  procedures  to  improve  legislator 

compliance i.e. FSA, Health & Safety etc.   Newly acquired Associates are transferred to Cambria employment contracts with the compensation 

and  beneﬁ ts commensurate of the particular  business.   A training  needs analysis  is conducted  followed  by the  implementation of training 

programmes for all relevant Associates in the new business.

9

Operating and Financial Review (continued)

Operation

With any new acquisition, the standard ﬁ nancial controls are implemented immediately ranging from branch bank accounts to daily reporting 

of vehicle  sales and aftersales  revenues,  margins and other  performance  ﬁ gures.    We  then  implement our  two growth  strategies which are 

(1) “Cambria Digital”, which is our internet social networking strategy for vehicle sales, and (2) in aftersales we implement the “Duty of Care 

Gearbox” which is designed to supply our guests with a one stop solution for all their vehicle maintenance needs. 

We believe our 3 step approach gives us a signiﬁ cant advantage particularly in diﬃ  cult economic times.   

Brand Partnerships

In line with our “buy and build” strategy, we have exercised 3 corporate acquisitions adding 7 locations and 10 franchises during the reporting 

period.  Our Invicta business in Kent has seen the addition of a Honda and Mazda dual franchise site in Maidstone and likewise a Honda and 

Mazda dual franchise site in Tunbridge Wells.   We have also added the iconic Triumph motorcycle brand and in doing so have become the single 

biggest Triumph motorcycle dealer in the world.   Pure Triumph Birmingham is the single biggest Triumph motorcycle dealership in the world.  

Triumph ﬁ ts extremely well with our Grange British prestige and high luxury businesses.  A signiﬁ cant number of our Aston Martin, Jaguar and 

Lotus guests are also motorcycle enthusiasts.  

As  part  of  the  same  transaction  that  added  the  Pure  Triumph  businesses,  we  also  added  Northampton  Motors  Mazda  which  establishes 

representation in the Midlands for the Cambria Group.  

Bolton Motor Park was a perfect strategic ﬁ t for our North West businesses adding the dual franchised Fiat and Mazda dealership on Manchester 

Road in Bolton. 

Cambria has enjoyed the beneﬁ ts of a strategically balanced brand portfolio with a strong mix of prestige/high luxury and volume businesses.  

Prestige

Continuing Businesses

Aston Martin

Jaguar

Lotus

Volvo

Acquisitions in Year

Honda

Volume

Citroen

Fiat

Ford

Nissan

Renault

Seat

3

5

1

5

14

2

Mazda

Fiat

16

Motorcycle

Triumph

1

4

5

1

1

1

13

4

1

18

0

3

3

Cambria’s balanced brand portfolio has seen us beneﬁ t from the rebound of the prestige/high luxury market.  The government’s scrappage 

scheme has ﬁ nished and this has certainly had an impact on volume operations in both vehicle volumes and retained margins with a reduction 

in potential target related bonuses.  

10

 
Blackburn

Preston

Bolton

Bury

Oldham

Warrington

Birmingham

Wellingborough

Northampton

Woburn

Swindon

Exeter

Automobiles plc

Locations across the UK

Welwyn
Garden City

Brentwood

Wimbledon

Croydon

Thanet

Tunbridge
Wells

Canterbury

Ashford

Maidstone

Gatwick

Horsham

11

Operating and Financial Review (continued)

When making acquisitions, the Board understands that the integration and maturing of the dealerships takes time and management investment.  

Where we acquire businesses from distressed sales, the integration process typically takes longer. 

We continue to promote the philosophy of stand alone autonomous business units where a local management team are empowered via our “four 

pillar strategy” to run a local business unit.  Cambria dealerships do not trade under the “Cambria” name but prefer to focus on local branding.  

Cambria’s dealerships trade as “Grange”, “Doves”, “Dees”, “Invicta Motors”, “Pure Triumph” or “Motorparks” depending on the franchise and the 

name in the local area.    When acquiring a business, the Board consider the geographical location of the franchise and then chooses to either 

adopt a new trading style or retain the existing business name.

New Car Sales

The new car market in the period increased by 18% assisted signiﬁ cantly by the government’s scrappage scheme.   Our new car volumes for the 

period were 9,163 units against a previous year of 5,805 units, an increase of 58% year on year.  On a like-for-like basis, 7,972 against a previous 

year of 5,805, an increase of 37% year on year.  Gross margins for new cars reduced from 7.7% to 6.9% following prices increases on new vehicles 

enforced by the respective brands following currency ﬂ uctuations and dilution of margins on vehicles sold under the scrappage scheme. 

Used Car Sales

2010 saw Cambria grow used car volumes to 14,034 units against a previous year of 10,465 an increase of 34%.  On a like-for-like basis, 12,466 

against a previous year of 10,465, an increase of 19%.  Gross margins on used cars reduced from 9.4% to 8.1%, reﬂ ecting a return to a more normal 

used car market.  Our used car strategy continues to be a core part of Cambria’s activity and with the continued success of the Cambria Digital 

strategy we believe this is an area where Cambria can continue to improve performance.   

We continue to pay particular attention to stock proﬁ le, price alignment and brand oﬀ erings in all our retail outlets. We have a small central 

buying team and continue to work with our re-marketing partner and local management to increase their knowledge and understanding of 

local market conditions. We continue to demonstrate that local management should purchase stock proﬁ led by price and model for their local 

market.  

Aftersales

Notwithstanding the decrease in the one to three year car parc, we saw our aftersales revenue increase by 23%, and on a like-for-like basis by 10%.  

Gross margins in the period showed a minor reduction from 43.2% to 42.3% in the current year.  The Aftersales departments contributed £21.8m 

of gross proﬁ t which represents 45.3% of total gross proﬁ t for the year.   

We continue with our “Duty of Care Gearbox” that is intended to provide all guests with a one stop maintenance solution for their vehicle. 

Outlook

The Board is pleased to report that September trading has been strong, with proﬁ ts ahead of the Board’s business plan and ahead of the previous 

year’s trading.   The Group is well placed to take advantage of opportunities aﬀ orded in these diﬃ  cult economic times.  In the last 12 months, we 

have acquired 10 new franchises operating from 7 diﬀ erent geographical locations, admitted the business to the AIM market whilst at the same 

time reducing our net debt position.   The Group continues to be cash generative and the costs of admission are non-recurring, accordingly the 

Board anticipate an even stronger ﬁ nancial position will be attained next year.  

12

Operating and Financial Review (continued)

Outlook (continued)

As set out  in  the  Strategy section of  the  Company’s admission document, we are  in discussions with a  number of vendors which  have  the 

potential to lead to a positive outcome.  We hope to be able to make announcements in due course.  We have continued to invest in our premises, 

and a full redevelopment of our Maidstone Honda and Mazda dealerships began in October.

Whilst these economic times remain uncertain and UK consumer conﬁ dence remains fragile, the Board is pleased with the start to the current 

ﬁ nancial  year.  There  are  still  opportunities  to  improve  performance  in  our  existing  and  newly  acquired  businesses.    The  Guest  Connect 

Programme encompassing Cambria Digital and Service & MOT Reminder, Electronic Vehicle Health Check and Service Plans launched this 

year, and we believe it has the potential to be an industry leading GRM process (Guest Relationship Management).  We continue to strive to 

provide world class service within our individual business units and continue the progress made in improving customer satisfaction scores.  

In summary, we have started the ﬁ nancial year well and we are in a strong position to take advantage of what is still a very fragmented franchised 

dealer market. 

New Car

Used Car

Aftersales

Internal sales

Total

Operating expenses

Operating proﬁ t before ﬂ otation 
and transaction expenses

Flotation and transaction 
expenses

Operating proﬁ t

2010
Revenue

2010
Revenue 
mix

£m

158.6

190.4

51.5

(8.4)

392.1

%

40.4

48.6

13.1

(2.1)

2010
Gross 
Proﬁ t

£m

10.9

15.4

21.8

48.1

(43.4 )

4.7

(1.5)

3.2

2010
Margin

2009
Revenue

2009
Revenue 
mix

%

6.9

8.1

42.3

12.3

£m

98.5

121.2

41.9

(6.1)

255.5

%

38.6

47.5

16.4

(2.4)

2009
Margin

%

7.7

9.4

43.2

14.5

2009
Gross 
Proﬁ t

£m

7.6

11.4

18.1

37.1

(33.7)

3.4

-

3.4

2009 
total

Year on 
year growth

Like-for-like 
growth

2010 
Existing 
businesses

2010 
Acquisitions 
in year

7,972

(1,629)

6,343

1,191

(37)

1,154

2010  
total

9,163

(1,666)

7,497

New units

Scrappage units

New units excluding 
Scrappage

5,805

(486)

5,319

Used units

12,466

1,568

14,034

10,465

Service hours

241,119

32,226

273,345

230,938

58%

37%

41%

19%

34%

18%

19%

4%

13

Operating and Financial Review (continued)

Finance Director’s Report

Overview

Total  revenues  in  the  period  increased  53%  to  £392.1m  from  £255.5m  in  the  prior  year.    The  new  acquisitions  accounted  for  £31.8m  of  the 

increased revenue. The Group achieved an organic increase in revenue of 41% which was shared across all areas of the business.   

Gross proﬁ t increased by £11m (29.4%) from £37.1m to £48.1m in the year reﬂ ecting a signiﬁ cant increase in revenue from each of the departments.   

Gross proﬁ t margin across the Group declined from 14.5% to 12.3% reﬂ ecting the change in revenue mix with the increase in new car sales at 

lower margins.  The aftersales operations contributed 45% of the total gross proﬁ t for the Group compared to 48% in the previous period, again 

reﬂ ecting the signiﬁ cant increases in Gross proﬁ t contribution from the new and used car departments.

In  April  2010  the  Company  was  admitted  to  AIM,  the  one  oﬀ   expenses  associated  with  that  listing  were  £1.47m,  and  the  transaction  costs 

associated to the acquisition of new businesses were £0.07m resulting in a total of £1.54m of non recurring costs.  

The underlying EBITDA in the period rose to £6.1m from £4.6m in the previous year.  Underlying operating proﬁ t was £4.7m compared to £3.4m 

in the previous year, resulting in an operating margin of 1.2% (2009: 1.3%).  Following the conversion to IFRS there are no amortisation charges 

relating to goodwill in the year or prior year.

Underlying operating expenses rose in line with the increased Gross Proﬁ t, increasing 29% to £43.3m from £33.8m.  

Net ﬁ nance expenses reduced to £0.6m from £1.3m in the previous year for two main reasons: ﬁ rstly, mortgage interest reduced to £0.3m in 

comparison with £0.5m in the previous year as a consequence of the fall in Bank base rate and LIBOR; secondly (due to a much stronger new 

vehicle market in the year) there was a reduction in net consignment stock charges and credits of £0.5m.  

The Group’s underlying proﬁ t before tax was £4.2m in comparison with £2.0m in the previous year.  Continuing operations contributed £4.4m 

of underlying proﬁ t before tax compared with £2.0m in the previous year. The Group’s acquisitions made a loss before tax of £0.3m which was in 

line with the Board’s expectation at the time of acquisition.

The underlying earnings per share were 3.06p (2009: 1.61p).

Taxation

The Group tax charge was £0.66m in the period (2009: £0.4m) representing an eﬀ ective rate of tax of 25% on the proﬁ t before tax of £2.6m. The 

reduced tax rate was aided by the utilisation of some brought forward tax losses and the reversal of an over accrual in the prior year.

Financial Position

The Group has a robust balance sheet with a net asset position of £16.0m under-pinned by £22.5m of freehold and long leasehold property.  

Reﬂ ecting our prudent approach to ﬁ nancial management the Group has only £0.3m of goodwill within the balance sheet.  Secured against the 

freehold and long leasehold property are mortgages amounting to £13.7m, each of the loans have diﬀ erent repayment proﬁ les between 7 and 10 

years, and bear interest at between base plus 1.25% and for those loans taken out more recently, LIBOR plus 3%.  During the ﬁ nancial year the 

Group comfortably met the bank covenants attaching to these borrowings. 

The net debt of the Group as at 31 August 2010 was £4.4m (2009: £5.7m), reﬂ ecting the Group’s cash position of £9.3m (2009: £5.8m).  The 

Group’s gearing at 31 August 2010 was 27.5%, reduced from 40% in 2009.

The  Group  uses  term  loan  facilities  to  fund  the  purchase  of  freehold  and  long  leasehold  properties,  it  utilises  stocking  loans  to  fund  the 

acquisition of consignment, demonstrator and used vehicles and has a £7.75m overdraft facility which is used to manage seasonal ﬂ uctuations 

in working capital.  The overdraft facilities are renewable annually and are next due in February 2011. 

14

 
Operating and Financial Review (continued)

Cashﬂ ow and Capital Expenditure

The Group generated an operating cash inﬂ ow of £8.1m after paying the £1.544m of ﬂ otation expenses and transaction fees.  The Group reduced 

working capital by £3.8m in the year due mainly to stock funding eﬃ  ciencies. The Group invested £5.1m in acquisitions and related property 

and £1.4m in capital expenditure.

Other capital expenditure included a signiﬁ cant refurbishment of our Preston dealership which represents Fiat Volvo and Lotus, minor corporate 

identity refurbishments at some of our other dealerships and further investment in our IT infrastructure.  

To ﬁ nance the purchase of the Maidstone and Tunbridge Wells freehold premises which cost £3.7m, the Group raised a term loan of £2.7m at 

LIBOR plus 3%.  During the year capital repayments of £0.4m were made against the total term loans outstanding.  The capital repayments due 

in the ﬁ nancial year to 31 August 2011 are £1.0m.  

As a result of the net cash increase of £3.5m to £9.3m and gross debt increasing by £2.3m to £13.7m, overall net debt reduced from £5.7m to £4.4m.

Shareholders’ Funds

Prior to admission to AIM, and in order to standardise the share capital of the Company, the share capital and share premium accounts were 

restructured to convert the historic A,B,C,D and E shares (with diﬀ erent nominal values) and the share premium account into a single class of 

ordinary share with a nominal value of 10p each.  There are now 100,000,000 ordinary shares of 10p each in issue with a resulting share premium 

of  £0.8m.   There were  no  new  funds  raised at admission  to  AIM  therefore  the share capital and share  premium account  remain at  £10.8m 

consistent with prior year.  All ordinary shares rank pari passu for both voting and dividend rights. 

Pension Schemes

The Group does not operate any deﬁ ned beneﬁ t pension schemes, and has no liability arising from a scheme.  The Group made contributions 

amounting to £0.2m to deﬁ ned contributions schemes for certain employees.

Financial Instruments

The Group does not have any contractual obligation under any ﬁ nancial instruments for the management of interest rate risk.

Dividends

In its admission document the Company stated that it did not intend to pay a dividend in respect of the year ended 31 August 2010.   Should 

the strong performance of the business experienced in the last year, be repeated in the coming year the Board would consider a ﬁ rst dividend in 

respect of the ﬁ nancial year ending 31st August 2011. 

15

 
 
Directors’ report

The directors present their directors’ report and ﬁ nancial statements for the year ended 31 August 2010.  

Principal activities

Cambria’s principal activities are the sale and servicing of motor vehicles and the provision of ancilliary services. The Group operates from 25 

sites with a total of 37 dealer franchises.

Enhanced Business Review

All details required are covered in the Chairman’s Statement and the Operating and Financial Review between pages 4 and 15.

Cambria Business Philosophy

Cambria’s culture – The Four Pillars
The Group works hard to instil a group culture. This culture is built around four pillars which are:

Pillar One - associate delight

The Directors believe that associates are the Company’s most important asset and therefore members of the team are not referred to as members 

of staﬀ  or employees, but rather as “associates”. The Directors want all associates to be proud to be associated with the Group and to be given 

the autonomy to make decisions that eﬀ ect the running of “their” business. The Directors promote internal development and foster a culture 

whereby associates feel they can achieve their career aspirations with Cambria. Equally, Cambria invests in it’s associates in order for them to 

achieve their full potential within the Group.

Pillar Two - guest delight

Cambria associates are encouraged to treat all customers at all times, in the way that they would treat a guest visiting their own home.  The 

Directors believe that associate empowerment is key to achieving this goal and the Directors believe that the organisation must be transparent 

and open at all times generating empathy with the diverse guest base of the Group.

Pillar Three - brand delight

The Group’s goal is to become the retailer of choice for all of the automotive manufacturers that it represents.  This pillar focuses on achieving 

the following goals:

•  brand vehicle sales objectives

•  brand part sales objectives

•  top half placing in brand customer satisfaction surveys

•  the development of a trusting relationship with brand personnel from the manufacturer partners

Pillar Four - stakeholder delight

The Group’s aims to provide satisfaction to its Stakeholders. It seeks to achieve this through:

•  disclosing timely and accurate information providing Stakeholders with a detailed  understanding of business performance; and

•  communicating openly and transparently.

Primary Risks

The primary risk to the Group is the continuing decline in the UK economy and volatility in the new and used car markets and the changes 

made by our manufacturer brand partners to the pricing and margin structure on the new vehicles that we sell.  Through implementing tight 

controls and building a strong operational Group infrastructure, the Directors believe they are taking all possible steps to protect the business.

The Group also has exposure to movements in interest rate due to the variable nature of the term loans.

16

Directors’ report (continued)

Proposed dividend

The directors do not recommend the payment of a dividend for 2010 (2009: £nil)

Directors 

The directors who held oﬃ  ce during the year were as follows:

W Scott

M J J Lavery 

R P Smith 

M W Burt 

J A Mullins

Sir P A Burt

All directors beneﬁ ted from qualifying third party indemnity provisions in place during the ﬁ nancial period. 

Associates

The Group recognises the beneﬁ t of keeping associates informed of group aﬀ airs and the views of associates are given full consideration at 

regular meetings with their representatives.

Full and  fair consideration  is given  to  the employment of disabled persons, who are  treated  no diﬀ erently  from other associates as regards 

recruiting, training, career development and promotion opportunities.  For people who may become disabled, in the course of employment, the 

group will make every eﬀ ort to accommodate them in suitable alternative employment.  

Political and charitable contributions

Neither the Company nor any of its subsidiaries made any political or charitable donations or incurred any political expenditure during the year 
(2009: £10,000).

Disclosure of information to auditors 

The directors who held oﬃ  ce at the date of approval of this directors’ report conﬁ rm that, so far as they are each aware, there is no relevant audit 

information of which the Company’s auditors are unaware; and each director has taken all the steps that he ought to have taken as a director to 

make himself aware of any relevant audit information and to establish that the company’s auditors are aware of that information. 

Auditors

In accordance with Section 489 of the Companies Act 2006, a resolution for the re-appointment of KPMG Audit Plc as auditors of the Company 

is to be proposed at the forthcoming Annual General Meeting. 

By order of the board

J A Mullins
Director

Dorcan Way, Swindon, SN3 3RA

26 November 2010

17

 
Statement of directors’ responsibilities in respect of the Directors’ Report and the 
ﬁ nancial statements      

The directors are responsible for preparing the Directors’ Report and the ﬁ nancial statements in accordance with applicable law and regulations.  

Company law requires the directors to prepare ﬁ nancial statements for each ﬁ nancial year.  As required by the AIM rules of the London Stock 

Exchange they are required to prepare the group ﬁ nancial statements in accordance with IFRSs as adopted by the EU and applicable law and 

have elected to prepare the parent company ﬁ nancial statements in accordance with UK Accounting Standards and applicable law (UK Generally 

Accepted Accounting Practice). 

Under company law the directors must not approve the ﬁ nancial statements unless they give a true and fair view of the state of aﬀ airs of the 

group and parent company and of their proﬁ t or loss for that period.

In preparing each of the group and parent company ﬁ nancial statements, the directors are required to:

•   select suitable accounting policies and then apply them consistently  

•  make judgments and estimates that are reasonable and prudent  

•  for the group ﬁ nancial statements, state whether they have been prepared in accordance with IFRSs as adopted by the EU

•  for the parent company ﬁ nancial statements state whether applicable UK Accounting Standards have been followed, subject to any material 

departures disclosed and explained in the parent company ﬁ nancial statements  

•  prepare the ﬁ nancial statements on the going concern basis unless it is inappropriate to presume that the group and parent company will 

continue in business

The directors are responsible for keeping adequate accounting records that are suﬃ  cient to show and explain the parent company’s transactions 

and disclose with reasonable accuracy at any time the ﬁ nancial position of the parent company and enable them to ensure that its ﬁ nancial 

statements comply with the Companies Act 2006.  They have general responsibility for taking such steps as are reasonably open to them to 

safeguard the assets of the group and to prevent and detect fraud and other irregularities. 

The directors are responsible for the maintenance and integrity of the corporate and ﬁ nancial information included on the company’s website.  

Legislation in the UK governing the preparation and dissemination of the ﬁ nancial statements may diﬀ er from legislation in other jurisdictions.

18

  
KPMG Audit plc
Arlington Business Park

Reading

Berkshire

RG7 4SD

Independent auditors’ report to the members of Cambria Automobiles plc

We have audited the ﬁ nancial statements of Cambria Automobiles plc for the year ended 31 August 2010 set out on pages 20 to 67. The ﬁ nancial 

reporting framework that has been applied in the preparation of the group ﬁ nancial statements is applicable law and International Financial 

Reporting Standards (IFRS) as adopted by the EU.  The ﬁ nancial reporting framework that has been applied in the preparation of the parent 

company ﬁ nancial statements is applicable law and UK Accounting Standards (UK Generally Accepted Accounting Practice).

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit 

work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditors’ report 

and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company 

and the company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

As explained  more fully  in the  Directors’  Responsibilities  Statement set out on page  18, the directors are responsible for the preparation of 

the ﬁ nancial statements and for being satisﬁ ed that they give a true and fair view. Our responsibility is to audit the ﬁ nancial statements in 

accordance with applicable  law and  International  Standards on Auditing  (UK and  Ireland). Those standards require us to comply with the 

Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.

Scope of the audit of the ﬁ nancial statements

A description of the scope of an audit of ﬁ nancial statements is provided on the APB’s web-site at www.frc.org.uk/apb/scope/UKNP. 

Opinion on ﬁ nancial statements

In our opinion:

•   the ﬁ nancial statements give a true and fair view of the state of the group’s and of the parent company’s aﬀ airs as at 31 August 2010 and of the 

groups’ proﬁ t for the year then ended;

•   the group ﬁ nancial statements have been properly prepared in accordance with IFRSs as adopted by the EU;

•  the parent company ﬁ nancial statements have been properly prepared in accordance with UK Generally Accepted Accounting Practice;

•  the ﬁ nancial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ Report for the ﬁ nancial year for which the ﬁ nancial statements are prepared is consistent 

with the ﬁ nancial statements. 

Matters on which we are required to report by exception

We have nothing to report in respect of the following.  Under the Companies Act 2006 we are required to report to you if, in our opinion:

•   adequate accounting records  have  not  been  kept,  by  the parent company or returns adequate  for our audit  have  not  been received  from 

branches not visited by us; or

•   the parent company ﬁ nancial statements are not in agreement with the accounting records and returns; or

•   certain disclosures of directors’ remuneration speciﬁ ed by law are not made; or

•   we have not received all the information and explanations we require for our audit.

Derek McAllan (Senior Statutory Auditor) 26 November 2010

for and on behalf of KPMG Audit plc, Statutory Auditor
Chartered Accountants

Arlington Business Park 

Reading 

Berkshire

RG7 4SD 

19

Consolidated Statement of comprehensive income
for year ended 31 August 2010

Revenue

Continuing operations

Acquisitions

Cost of sales

Continuing operations

Acquisitions

Gross Proﬁ t

Continuing Operations

Acquisitions

Other operating income

Administrative expenses

Continuing operations

Acquisitions

Results from operating activities

Finance income

Finance expenses

Net ﬁ nance expenses

Proﬁ t before tax from continuing operations before ﬂ otation and 
transaction costs

Loss before tax – acquisitions

Flotation expenses

Transaction costs on business combinations

Proﬁ t before tax

Taxation

Proﬁ t and total comprehensive income for the period

Note

3

2010 

£000

2009 

Re-presented*

£000

360,307

31,810

392,117

(316,792)

(27,264)

255,466

-

255,466

(218,331)

-

(344,056)

(218,331)

4

5  

4

9  

9  

4

4  

4

10  

43,515

4,546

48,061

-

(40,211)

(4,667)

3,183

12

(588)

(576)

4,417

(266)

4,151

(1,474)

(70)

2,607

(657)

1,950

37,135

-

37,135

3

(33,767)

-

3,371

41

(1,370)

(1,329)

2,042

-

2,042

-

-

2,042

(432)

1,610

1.61p

Basic and diluted earnings per share

8  

1.95p  

* see note 27

All comprehensive income is attributable to owners of the parent company

20

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statement of changes in equity
for year ended 31 August 2010

Share capital

Share premium Retained earnings

Total equity

£000

£000

£000

£000

Balance at 31August 2008

Proﬁ t for the year

Balance at 31 August 2009

Restructuring of share capital

Proﬁ t for the year

318

-

318

9,682

-

10,481

-

10,481

(9,682)

-

Balance at 31 August 2010

10,000

799

1,676

1,610

3,286

-

1,950

5,236

12,475

1,610

14,085

-

1,950

16,035

21

 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statement of ﬁ nancial position
at 31 August 2010

Non-current assets

Property, plant and equipment

Intangible assets

Deferred tax asset

Current assets

Inventories

Trade and other receivables

Cash and cash equivalents

Total assets

Current liabilities

Other interest-bearing loans and borrowings 

Trade and other payables

Taxation

Provisions

Non-current liabilities

Other interest-bearing loans and borrowings

Provisions

Other payables

Total liabilities

Net assets

Equity attributable to equity holders of the parent 

Share capital

Share premium

Retained earnings

Total equity

* see note 27

Note

11

12  

13  

14

15

16

17

18

20  

17

20  

13  

21

2010 

£000

25,520

480

508

26,508

62,435

7,938

9,266

79,639

106,147

(1,024)

(74,896)

(519)

(342)

(76,781)

(12,672)

(151)

(508)

(13,331)

(90,112)

16,035

10,000

799

5,236

16,035

2009 

Re-presented*

£000

21,466

478

645

22,589

43,523

7,200

5,777

56,500

79,089

(294)

(52,239)

-

(452)

(52,985)

(11,138)

(236)

(645)

(12,019)

(65,004)

14,085

318

10,481

3,286

14,085

These ﬁ nancial statements were approved by the board of directors on 26 November 2010 and were signed on its behalf by:

Mark Lavery
Director
Company registered number: 05754547

22

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Cash Flow Statement
for year ended 31 August 2010

Note

Cash ﬂ ows from operating activities

Proﬁ t for the year

Adjustments for:

Depreciation, amortisation and impairment

11/12

Financial income

Financial expense

(Gain)/loss on sale of property, plant and equipment

Taxation

Transaction and ﬂ otation expenses

9  

9  

10  

4

(Increase)/decrease in trade and other receivables

(Increase)/decrease in inventories

(Decrease)/increase in trade and other payables

(Decrease)/increase in provisions

Interest paid

Tax received

Transaction and ﬂ otation expenses 

Net cash from operating activities

Cash ﬂ ows from investing activities

Proceeds from sale of property, plant and equipment

Interest received

Acquisition of subsidiary 

Acquisition of property, plant and equipment

Acquisition of other intangible assets

Net cash from investing activities

Cash ﬂ ows from ﬁ nancing activities

Proceeds from new loan

Interest paid

Repayment of borrowings

Net cash from ﬁ nancing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at 1 September 2009

Cash and cash equivalents at 31 August 2010

4

2

16

16

2010 

£000

1,950

1,338

(12)

588

1

657

1,544

6,066

(738)

(17,609)

22,388

(195)

9,912

(233)

-

(1,544)

8,135

-

12

(5,082)

(1,429)

(57)

(6,556)

2,655

(355)

(390)

1,910

3,489

5,777

9,266

2009 

£000

1,610

1,192

(41)

1,370

(3)

432

-

4,560

1,102

(1,657)

2,542

(910)

5,637

(821)

33

-

4,849

7

41

-

(873)

(133)

(958)

-

(533)

(24)

(557)

3,334

2,443

5,777

23

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes
(forming part of the ﬁ nancial statements)

1  Accounting policies

Cambria Automobiles plc is a company which quoted on the AIM market of the London Stock Exchange Plc and is incorporated and domiciled 

in the United Kingdom.  The address of the registered oﬃ  ce is Swindon Motor Park, Dorcan Way, Swindon, SN3 3RA.  The registered number 

of the company is 05754547. 

These ﬁ nancial statements as at 31 August 2010 consolidate those of the Company and its subsidiaries (together referred to as the “Group”).  The 

parent company ﬁ nancial statements present information about the Company as a separate entity and not about its group. 

The  Group  ﬁ nancial  statements  have  been  prepared  and  approved  by  the  directors  in  accordance  with  International  Financial  Reporting 

Standards as adopted by the EU (“Adopted IFRS”).  The Company has elected to prepare its parent company ﬁ nancial statements in accordance 

with UK GAAP; and these are presented on pages 56 to 67.

The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in the ﬁ nancial statements. 

Judgements made by the directors in the application of these accounting policies that have signiﬁ cant eﬀ ect on the ﬁ nancial statements and 

estimates with a signiﬁ cant risk of material adjustment in the next year are discussed at the end of this note.

The consolidated ﬁ nancial statements for the year ended 31 August 2009 were prepared under UK GAAP.  In addition to those consolidated 

ﬁ nancial statements, an AIM admission document was issued that was prepared in accordance with Adopted IFRS for the period from the date 

of the AIM admission which was 1 April 2009 to 31 August 2009. As a result, this set of statutory ﬁ nancial statements is the Group’s second set of 

ﬁ nancial statements prepared in accordance with Adopted IFRS. However, since this is the ﬁ rst set of statutory ﬁ nancial statements published 

in accordance with Adopted IFRS an illustrative explanation of the diﬀ erences between UK GAAP and Adopted IFRS is set out in Note 27. 

Basis of preparation

The ﬁ nancial statements are prepared under the historical cost convention.

The directors believe that the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook

The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable 

future. Thus they continue to adopt the going concern basis in preparing the annual ﬁ nancial statements.

Further information regarding the company’s business activities together with the factors likely to aﬀ ect its future development, performance 

and position is set out in the Directors’ Report on page 16.

Basis of consolidation

The ﬁ nancial statements consolidate the ﬁ nancial statements of the Company together with its trading subsidiary companies.

Subsidiaries

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the ﬁ nancial 

and operating policies of an entity so as to obtain beneﬁ ts from its activities. In assessing control, potential voting rights that are currently 

exercisable or convertible are taken into account. The ﬁ nancial information of subsidiaries is included from the date that control commences 

until the date that control ceases. 

All business combinations are accounted for by applying the purchase method. The cost of an acquisition is measured as the fair value of the 

assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange.  Identiﬁ able assets acquired and liabilities 

and contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date irrespective of the extent 

of any minority interest. Any contingent consideration payable is recognised at fair value at the acquisition date. Subsequent changes to the fair 

value of the contingent consideration are recognised in proﬁ t or loss.

The excess of the cost of an acquisition over the fair values of the Group’s share of identiﬁ able assets and liabilities acquired is recognised as 

goodwill.  If the fair value of identiﬁ able assets and liabilities acquired (i.e. discount on acquisition) exceeds the cost of the business combination, 

the diﬀ erence is recognised directly in proﬁ t or loss.  

Inter-company transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated on consolidation.

24

Notes (continued)
(forming part of the ﬁ nancial statements)

Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief 

operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identiﬁ ed 

as the Chief Executive Oﬃ  cer. 

Revenue recognition

Revenue  is  measured at the  fair value of the consideration received or receivable and represents amounts receivable  for goods and services 

provided in the normal course of business, net of discounts and VAT.

Sales of  motor vehicles, parts and accessories are recognised when  the signiﬁ cant risks and rewards of ownership  have  been  transferred  to 

the buyer.  In general this occurs when vehicles or parts are delivered to the customer and title has passed.  Servicing and bodyshop sales are 

recognised on completion of the agreed work. 

Deposits received from customers

Deposits received from customers prior to the completion of a sale (delivery of vehicle) are included in the accounts as creditors falling due 

within one year.

Expenses

Financing income and expenses

Financing  expenses  comprise  interest  payable,  ﬁ nance  charges  on  shares  classiﬁ ed  as  liabilities,  stocking  interest  charge  on  consignment 

and  used vehicles and  ﬁ nance  leases.    Financing  income comprise  interest  receivable on  funds  invested and  interest credits  received  from 

manufacturers on stock management.

Borrowing costs are recognised in the period in which they are incurred.

Interest income and interest payable is recognised in proﬁ t or loss as it accrues, using the eﬀ ective interest method. 

Operating proﬁ t

Operating proﬁ t relates to proﬁ t before ﬁ nance income, ﬁ nance expense and income tax expense.

25

Notes (continued)
(forming part of the ﬁ nancial statements)

1  Accounting policies (continued)

Intangible assets

Goodwill

Goodwill  represents  the excess  between  the cost of an acquisition of a  subsidiary compared  to  the  net  fair value of  the  identiﬁ able assets, 

liabilities and contingent liabilities, and recognition of identiﬁ able intangibles at the date of acquisition. Identiﬁ able intangibles are those which 

can be sold separately or which arise from legal rights regardless of whether those rights are separable. 

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units of the acquiree which represent 

the smallest identiﬁ able group of assets that generates cash inﬂ ows that are largely independent of the cash inﬂ ows from other assets or groups 

of assets.  Goodwill  is  not amortised  but  is tested annually  for  impairment. Any  impairment  is recognised  immediately  in the statement of 

comprehensive income and is not subsequently reversed.

Other intangible assets

Expenditure on internally generated goodwill and brands is recognised as an expense as incurred.

Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and accumulated impairment losses.

Amortisation 
Amortisation is charged on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indeﬁ nite. Intangible 

assets with an indeﬁ nite useful life and goodwill are systematically tested for impairment at each year. Other intangible assets are amortised 

from the date they are available for use. The estimated useful lives are as follows:

Computer software 

3 – 5 years 

Order book 

Customer list 

6 months following date of acquisition

3 years following date of acquisition

The fair value of customer lists on acquisition have been calculated using discounted cash ﬂ ows.  The fair value of the order book on acquisition 

has been calculated based on post acquisition margins associated with deposits for future sales held at the date of acquisition. 

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.

Where parts of an item of property, plant and equipment have diﬀ erent useful lives, they are accounted for as separate items of property, plant 

and equipment.

Depreciation is charged on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Land is 

not depreciated. The estimated useful lives are as follows:

•  freehold buildings 

50 years

•  leasehold properties 

over the lifetime of the lease

•  plant and machinery 

•  ﬁ xtures and ﬁ ttings 

•  computer equipment 

5 to 10 years

5 to 10 years

3 to 5 years

Depreciation methods, useful lives, residual values and possible impairments have been reviewed at the year end. As a result of this review, no 

impairment charge has been deemed necessary for the period.

26

Notes (continued)
(forming part of the ﬁ nancial statements)

Impairment excluding inventories and deferred tax assets

The carrying amounts of the Group’s assets, are reviewed at each year end to determine whether there is any indication of impairment; an asset 

is considered to be impaired if objective evidence indicates that one or more events have had a negative eﬀ ect on the estimated future cash ﬂ ows 

of that asset. If any such indication exists, the asset’s recoverable amount is estimated. 

For goodwill, assets that have an indeﬁ nite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated 

at each year end.

An  impairment  loss  is  recognised  whenever  the  carrying  amount  of  an  asset  or  its  cash-generating  unit  exceeds  its  recoverable  amount. 

Impairment losses are recognised in income.

Impairment losses recognised in respect of cash-generating units are allocated ﬁ rst to reduce the carrying amount of any goodwill allocated to cash-

generating units and then to reduce the carrying amount of the other assets in the unit on a pro rata basis.  A cash generating unit is the smallest 

identiﬁ able group of assets that generates cash inﬂ ows that are largely independent of the cash inﬂ ows from other assets or groups of assets.

The recoverable amount of other assets is the greater of their fair values less costs to sell and value in use. In assessing value in use, the estimated 

future cash ﬂ ows are discounted to their present value using a pre-tax discount rate that reﬂ ects current market assessments of the time value 

of money and the risks speciﬁ c to the asset. 

For an asset that does not generate largely independent cash inﬂ ows, the recoverable amount is determined for the cash-generating unit to 

which the asset belongs.

Reversals of impairment

An impairment loss in respect of trade and other receivables carried at amortised cost is reversed if the subsequent increase in recoverable 

amount can be related objectively to an event occurring after the impairment loss was recognised.

An impairment loss in respect of goodwill is not reversed. 

In respect of other assets, an impairment loss is reversed when there is an indication that the impairment loss may no longer exist and there has 

been a change in the estimates used to determine the recoverable amount.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been 

determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Inventories

Inventories are stated at the lower of cost and net realisable value. In determining the cost of motor vehicles, the actual amount paid to date 

for each vehicle is used, for spare parts and service items cost is based on the ﬁ rst-in ﬁ rst-out principle.  An appropriate provision is made for 

obsolete or slow moving items.

New vehicles on consignment from manufacturers are included in the Statement of Financial Position with a corresponding liability in creditors 

due within one year. This stock is considered to be under the control of the Group as it is considered that the Group bears all the risks and 

rewards or ownership, even though legal title has not yet passed.

Consignment  stock  is  held  for  a  maximum  period  (which  varies  between  manufacturers)  before  becoming  due  for  payment.  Part  of  the 

consignment  period  is  interest  free  and  the  remaining  periods  are  interest  bearing  (periods  and  charges  vary  between  manufacturers  but 

interest is generally linked to LIBOR). 

Used motor vehicles are stated at the lower of cost or net realisable value, by reference to Glass’s Guide or CAP data.

27

Notes (continued)
(forming part of the ﬁ nancial statements)

1  Accounting policies (continued)

Financial Instruments

Classiﬁ cation of ﬁ nancial instruments issued by the Group

Financial instruments issued by the Group are treated as equity only to the extent that they meet the following two conditions: 

a)  they include no contractual obligations upon the group to deliver cash or other ﬁ nancial assets or to exchange ﬁ nancial assets or ﬁ nancial 

liabilities with another party under conditions that are potentially unfavourable to the group; and 

b)  where the instrument will or may be settled in the company’s own equity instruments, it is either a non-derivative that includes no obligation 

to deliver a variable number of the company’s own equity instruments or is a derivative that will be settled by the company’s exchanging a 

ﬁ xed amount of cash or other ﬁ nancial assets for a ﬁ xed number of its own equity instruments.

To the extent that this deﬁ nition is not met, the proceeds of issue are classiﬁ ed as a ﬁ nancial liability.  Where the instrument so classiﬁ ed takes 

the legal form of the company’s own shares, the amounts presented in the historical ﬁ nancial information  for called up share capital and share 

premium account exclude amounts in relation to those shares.  

Non-derivative ﬁ nancial instruments

Non-derivative ﬁ nancial instruments comprise, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and 

other payables.

Trade and other receivables

Trade and other receivables are recognised initially at fair value.  Subsequent to initial recognition they are measured at amortised cost using the 

eﬀ ective interest method, less any impairment losses.

Trade and other payables

Trade and other payables are recognised initially at fair value.  Subsequent to initial recognition they are measured at amortised cost using the 

eﬀ ective interest method.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part 

of the Group’s cash management are included as a component of cash and cash equivalents for the purpose only of the cash ﬂ ow statement.

Interest-bearing borrowings

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-

bearing borrowings are stated at amortised cost using the eﬀ ective interest method.

28

Notes (continued)
(forming part of the ﬁ nancial statements)

Taxation

Tax on the proﬁ t or loss for the year comprises current and deferred tax. Tax is recognised except to the extent that it relates to items recognised 

in other comprehensive income, in which case it is recognised in other comprehensive income.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet 

date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided on temporary diﬀ erences between the carrying amounts of assets and liabilities for ﬁ nancial reporting purposes and 

the  amounts  used  for  taxation  purposes.  The  following  temporary  diﬀ erences  are  not  provided  for:  the  initial  recognition  of  goodwill;  the 

initial recognition of assets or liabilities that aﬀ ect neither accounting nor taxable proﬁ t other than in a business combination, and diﬀ erences 

relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax 

provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or 

substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable proﬁ ts will be available against which the temporary 

diﬀ erence can be utilised. 

Employee beneﬁ ts

Deﬁ ned contribution plans

A deﬁ ned contribution plan is a post-employment beneﬁ t plan under which the company pays ﬁ xed contributions into a separate entity and 

will have no legal or constructive obligation to pay further amounts. Obligations for contributions to deﬁ ned contribution pension plans are 

recognised as an expense as incurred.

Leasing

Leases in which the Group assumes substantially all the risks and rewards of ownership of the leased asset are classiﬁ ed as ﬁ nance leases.  Where 

land and buildings are held under leases the accounting treatment of the land is considered separately from that of the buildings.  Leased 

assets acquired by way of ﬁ nance lease are stated at an amount equal to the lower of their fair value and the present value of the minimum lease 

payments at inception of the lease, less accumulated depreciation and less accumulated impairment losses.  Lease payments are accounted for 

as described below.

Operating lease payments

Payments made under operating leases are recognised in the statement of comprehensive income on a straight-line basis over the term of the 

lease. Lease incentives received are recognised as an integral part of the total lease expense. 

Finance lease payments

Minimum lease payments are apportioned between the ﬁ nance charge and the reduction of the outstanding liability. The ﬁ nance charge is 

allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Provisions

A provision is recognised in the Statement of Financial Position when the Group has a present legal or constructive obligation as a result of a past 

event, that can be reliably measured and it is probable that an outﬂ ow of economic beneﬁ ts will be required to settle the obligation. 

29

Notes (continued)
(forming part of the ﬁ nancial statements)

1  Accounting policies (continued)

Adopted IFRS not yet applied

The following Adopted IFRSs have been issued but have not been applied by the Group in these ﬁ nancial statements.  Their adoption is not 

expected to have a material eﬀ ect on the ﬁ nancial statements unless otherwise indicated:

•  IFRS  8 amended clariﬁ es that segment  information for total assets  is only required  if such  information  is regularly reported to the chief 

operating decision maker

•  IAS 17 has been amended to clarify that a lease of land with an indeﬁ nite economic life need not be classiﬁ ed as an operating lease

Critical accounting judgements in applying the Group’s accounting policies

Estimates and judgements are continually evaluated and are based on historical experience and other factors including expectations of future 

events that are believed to be reasonable under the circumstances.  

Certain critical accounting judgements in applying the Group’s accounting policies are described below:

Goodwill impairment

The carrying value of goodwill is tested annually for impairment by using cash ﬂ ow projections for each cash generating unit.  

Intangible assets

On the acquisition of Grange Motors (Swindon) Limited in the period ended 31 August 2007, a third party valuation has been carried out on the 

intangible assets that are pertinent to the motor business.  This included consideration of franchise rights, brand, and other intangible assets.  

The directors apply the principles of the external valuation of the intangibles on the Swindon acquisition to subsequent acquisitions and have 

concluded that intangibles arising on subsequent acquisitions are immaterial.

Consignment inventories

Consignment vehicles are regarded as being eﬀ ectively under the control of the Group and are included within inventories in the Statement of 

Financial Position as the Group has the signiﬁ cant risks and rewards of ownership even though legal title has not yet passed.  The corresponding 

liability is included in trade and other payables.

Deferred tax

Deferred tax assets and liabilities require management judgement in determining the amounts to be recognised.  In particular judgement is used 

when assessing the extent to which deferred tax assets should be recognised with consideration given to the timing and level of future taxable 

income.  

30

Notes (continued)
(forming part of the ﬁ nancial statements)

2  Acquisition of subsidiaries

Eﬀ ect of acquisitions in 2009

There were no acquisitions in 2009.

Eﬀ ect of acquisitions 2010

On 31 October 2009 the Group acquired the trade and assets of certain dealerships from the Administrators of Autohaus Limited for a cash 

consideration  of  £369,000.    Transaction  fees  of  £30,000  have  been  charged  to  operating  expenses  in  the  year.    No  goodwill  arose  on  this 

transaction.  In the 10 months to 31 August 2010 the businesses contributed a net loss of £161,000 to the consolidated net proﬁ t for the year.  No 

further disclosures have been made in respect of this acquisition as the directors consider the amounts to be immaterial.

On 4 January 2010 the Group began trading as a Fiat and Mazda dealer in Bolton following the acquisition of certain assets from the Administrator 

of Lythgoe Motors Limited for £22,500 on 23 December 2009.  No goodwill arose on this transaction.  In the 8 months to 31 August 2010 the 

business contributed a net loss of £170,000 to the consolidated net proﬁ t for the year. No further disclosures have been made in respect of this 

acquisition as the directors consider the amounts to be immaterial.

On 25 February 2010, the Group acquired all of the ordinary shares in D & F Trading Limited (renamed Invicta Motors (Maidstone) Limited 

post acquisition) and two freehold properties from Drake and Fletcher Limited.  The company was a motor dealership group based in Kent. In 

the 6 months to 31 August 2010 the subsidiary contributed net proﬁ t of £65,000 to the consolidated net proﬁ t for the year.  If the acquisition had 

occurred on 1 September 2009, it would have contributed a further £17 million to Group revenue however we do not expect that it would have 

added further proﬁ tability to the Group.

The reason for the acquisition was to expand the Group’s representation in the Kent area with Mazda and the addition of the Honda franchise 

to the Group.

The acquisition had the following eﬀ ect on the Group’s assets and liabilities.

Acquiree’s net assets at the acquisition date:

Freehold property 

Plant and equipment

Inventories

Trade and other payables

Net and identiﬁ able assets and liabilities

Goodwill on acquisition

Consideration paid (note that transaction costs of £39,500 have been written off to operating expenses), 
satisﬁ ed in cash

Pre-acquisition carrying 
amount and Fair Value

£000

3,738

150

1,303

(109)

5,082

-

5,082

32

 
 
 
 
 
 
 
Notes (continued)
(forming part of the ﬁ nancial statements)

3  Revenue

Sale of goods 

Aftersales services

Total revenues 

4  Segmental reporting

2010 

£000

349,096

43,021

2009 

£000

219,724

35,742

392,117

255,466

The Group has adopted IFRS 8 ‘Operating Segments’ which determines and presents operating segments based on information presented to 

the Group’s Chief Operating Decision Maker (“CODM”), the Chief Executive Oﬃ  cer. The Group is operated and managed on a Dealership by 

Dealership basis.  The CODM receives information both on a dealership basis and by revenue stream (New, Used, Aftersales). Given the number 

of dealerships, it was deemed most appropriate to present the information by revenue stream for the purposes of segmental analysis.

2010
Revenue

2010
Revenue 
mix

%

40.4

48.6

13.1

(2.1)

£m

158.6

190.4

51.5

(8.4)

392.1

2010
Gross 
Proﬁ t

£m

10.9

15.4

21.8

2010
Margin

2009
Revenue

2009
Revenue 
mix

%

6.9

8.1

42.3

£m

98.5

121.2

41.9

(6.1)

%

38.6

47.5

16.4

(2.4)

2009
Gross 
Proﬁ t

£m

7.6

11.4

18.1

2009
Margin

%

7.7

9.4

43.2

48.1

12.3

255.5

37.1

14.5

(43.4)

4.7

(1.5)

3.2

(33.7)

3.4

-

3.4

New Car

Used Car

Aftersales

Internal sales

Total

Operating expenses

Operating proﬁ t before ﬂ otation 
and transaction expenses

Flotation and transaction 
expenses

Operating proﬁ t

The  Board  reviews  the  performance  of  the  business  in  terms  of  both  net  proﬁ t  before  tax  and  EBITDA,  as  such  the  Board  has  included  a 

reconciliation of EBITDA to the Proﬁ t before tax.

33

 
 
 
 
 
 
Notes (continued)
(forming part of the ﬁ nancial statements)

4  Segmental reporting (continued)

Proﬁ t Before Tax

Transaction and ﬂ otation costs

Underlying Proﬁ t Before Tax

Net ﬁ nance expense

Depreciation 

Net loss/(gain) on disposal of property, plant and equipment

EBITDA

Transaction and ﬂ otation costs

Underlying EBITDA

5  Other operating income

Gain on disposal of property, plant and equipment

6  Expenses and auditors’ remuneration

Included in proﬁ t/(loss) are the following:

Impairment loss (reversed)/recognised on other trade receivables and prepayments

Auditors’ remuneration:

Audit of these ﬁ nancial statements

Audit of ﬁ nancial statements of subsidiaries pursuant to legislation

Other services relating to taxation

All other services

34

2010

£000

2,607

1,544

4,151

576

1,338

1

4,522

1,544

6,066

2010

£000

-

2010

£000

(261)

2010

£000

20

90

25

30

2009

£000

2,042

-

2,042

1,329

1,192

(3)

4,560

-

4,560

2009

£000

3

2009

£000

205

2009

£000

10

78

24

-

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes (continued)
(forming part of the ﬁ nancial statements)

7  Staff numbers and costs

The average number of persons employed by the group (including directors) during the year, analysed by category, was as follows:

Number of employees

Sales

Service

Parts

Administration

The aggregate payroll costs of these persons were as follows:

Wages and salaries

Social security costs

Expenses related to deﬁ ned contribution plans

2010

281

339

165

161

946

2010

£000

26,761

2,860

161

2009

217

311

98

132

758

2009

£000

19,598

2,087

161

29,782

21,846

8   Earnings per share

Basic earnings per share is calculated by dividing the earnings attributable to equity shareholders by the number of ordinary shares in issue in 

the year.  Prior to admission to AIM on 1 April 2010 the shareholder structure of the Group’s parent company was composed of ﬁ ve diﬀ erent share 

classes with varying rights attributing to them.  The share structure was reorganised prior to admission to AIM resulting in the conversion of the 

various classes of share into one class of ordinary share with 100,000,000 shares in issue.  The analysis of earnings per share has been prepared 

on the basis of the revised ordinary share structure, not on the basis of the shares at the balance sheet date.

There are no dilutive share options in issue.

Proﬁ t attributable to shareholders

Expense of transaction and ﬂ otation costs

Tax on adjustments (at 28%)

Adjusted proﬁ t attributable to equity shareholders

2010

£000

1,950

1,544

(432)

3,062

2009

£000

1,610

-

-

1,610

Adjusted number of shares in issue (£000)

100,000

100,000

Basic earnings per share

Adjusted earnings per share

1.95p

3.06p

1.61p

1.61p

35

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes (continued)
(forming part of the ﬁ nancial statements)

9  Finance income and expense

Recognised in proﬁ t or loss

Finance income

Rent deposit interest

Interest receivable 

Total ﬁ nance income

Finance expense

Interest payable on bank borrowings

Consignment and used stocking interest

Total ﬁ nance expense

Total  interest expense on ﬁ nancial liabilities held at amortised cost

Total other interest expense

10  Taxation

Recognised in the income statement

Current tax expense

Current year

Deferred tax

Utilisation of tax losses paid to previous owner of subsidiary undertaking

Adjustment in respect of prior years

Total tax expense

36

2010

£000

-

12

12

355

233

588

355

233

588

2010

£000

519

519

215

(77)

138

657

2009

£000

2

39

41

549

821

1,370

549

821

1,370

2009

£000

-

-

432

-

432

432

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes (continued)
(forming part of the ﬁ nancial statements)

10  Taxation (continued)

Reconciliation of total tax

Proﬁ t for the year

Total tax expense

Proﬁ t excluding taxation

Tax using the UK corporation tax rate of 28% (2009:28%)

Non-deductible expenses

Tax exempt income

Accounting deprecation for which no tax relief is due

Utilisation of tax losses 

Tax payment due to previous owners of subsidiary in relation to utilisation of pre-
acquisition losses

Adjustment in respect of prior years

Total tax expense 

2010

£000

1,950

657

2,607

730

168

-

144

(523)

215

(77)

657

2009

£000

1,610

432

2,042

572

-

(30)

-

(542)

432

-

432

37

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes (continued)
(forming part of the ﬁ nancial statements)

11  Property, plant and equipment 

Freehold 
land &
 buildings

Long 
leasehold 
land & 
buildings

Short  
leasehold 
land & 
buildings

Plant & 
equipment

Fixtures, 
ﬁ ttings & 
computer 
equipment

Total

£000

£000

£000

£000

£000

£000

Cost

Balance at 1 September 2008

14,594

5,032

Additions

Disposals

Transfer

12

-

-

26

-

-

3,372

282

-

-

8,041

92

(34)

596

461

(2)

(5,274)

5,274

31,635

873

(36)

-

Balance at 1 September 2009

14,606

5,058

3,654

Additions

Acquired through business combinations

Disposals

580

3,738

-

-

-

-

82

-

-

2,825

169

150

(445)

6,329

32,472

622

-

(837)

1,453

3,888

(1,282)

Balance at 31 August 2010

18,924

5,058

3,736

2,699

6,114

36,531

Depreciation 

Balance at 1 September 2008

Charge for the year

Disposals

Transfer

Balance at 1 September 2009

Depreciation charge for the year

Disposals

647

189

-

-

836

256

-

237

81

-

-

318

83

-

2,362

168

-

-

2,530

184

-

6,143

254

(32)

486

471

-

(4,006)

4,006

2,359

280

(444)

4,963

481

(835)

9,875

1,163

(32)

-

11,006

1,284

(1,279)

Balance at 31 August 2010

1,092

401

2,714

2,195

4,609

11,011

Net book value

At 31 August 2009

13,770

4,740

1,124

466

1,366

21,466

At 31 August 2010

17,832

4,657

1,022

504

1,505

25,520

Security

The title of all freehold and long leasehold properties except for the property located at Bottom O’th Moor, Huddersﬁ eld Road, Oldham, OL1 

3HQ and the property located at Port Way, Ashton on Ribble, Preston, Lancs, PR2 2YQ have been pledged as security to the bank loans disclosed 

in note 17.

Property, plant and equipment under construction

At 31 August 2010 there were no assets in the course of construction  (2009: £nil).

38

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes (continued)
(forming part of the ﬁ nancial statements)

12  Intangible assets 

Cost

Balance at 1 September 2008

Other acquisitions – externally purchased

Balance at 1 September 2009

Other acquisitions – externally purchased

Balance at 31 August 2010

Amortisation and impairment 

Balance at 1 September 2008

Amortisation

Balance at 1 September 2009

Amortisation for the year

Balance at 31 August 2010

At 31 August 2009 and 1 September 2009

At 31 August 2010

Goodwill

£000

Software

£000

Other

£000

346

-

346

-

346

-

-

-

-

-

346

346

456

133

589

57

646

443

15

458

54

512

132

134

176

-

176

-

176

161

15

176

-

176

-

-

Total

£000

978

133

1,111

57

1,168

604

30

634

54

688

478

480

The undertakings included in the consolidated Group accounts are as follows:

  *  Owned directly by Cambria Automobiles Acquisitions Limited

  **  Owned directly by Cambria Automobiles Group Limited

 ***  Owned directly by Cambria Automobiles (South East) Limited

Country of incorporation

Principal activity

Class and percentage of 
shares held

Subsidiary undertakings

Cambria Automobiles Group Limited

England and Wales

Holding Company

Cambria Automobiles Acquisitions Limited **

England and Wales

Investment Company

100% Ordinary

100% Ordinary

Cambria Automobiles Property Limited **

England and Wales

Property Company

100% Ordinary

Cambria Automobiles (Swindon) Limited *

England and Wales

Grange Motors (Swindon) Limited *  

Thoranmart Limited *

Cambria Vehicle Services Limited*

England and Wales

England and Wales

England and Wales

Cambria Automobiles (South East) Limited*

England and Wales

Grange Motors (Brentwood) Limited***

Invicta Motors Limited***

Deeslease Limited

Dove Group Limited

Translease Vehicle Management Limited

Invicta Motors (Maidstone) Limited*

England and Wales

England and Wales

England and Wales

England and Wales

England and Wales

England and Wales

Motor retailer

Motor retailer

Motor retailer

Motor retailer

Motor retailer

Motor retailer

Motor retailer

Dormant

Dormant

Dormant

Motor retailer

100% Ordinary & Preference 

100% Ordinary

100% Ordinary

100% Ordinary

100% Ordinary

100% Ordinary

100% Ordinary & Preference 

100% Ordinary

100% Ordinary

100% Ordinary

100% Ordinary

39

             
 
     
         
         
     
              
             
 
         
     
              
              
     
         
            
  
             
 
           
   
          
    
             
 
           
   
    
          
Notes (continued)
(forming part of the ﬁ nancial statements)

12  Intangible assets (continued)

Amortisation charge

The amortisation charge is recognised in the following line items in the income statement:

Administrative expenses

2010

£000

54

2009

£000

29

Impairment loss and subsequent reversal

Goodwill and indeﬁ nite life intangible assets considered signiﬁ cant in comparison to the Group’s total carrying amount of such assets have been 

allocated to cash generating units or groups of cash generating units as follows:

Grange Motors (Swindon) Ltd

Thoranmart Ltd

Goodwill

2010

£000

261 

85

346

2009

£000

261

85

346

The recoverable amount of each CGU has been calculated with reference to its value in use.  The key assumptions of this calculation are a review 

of one year’s EBITDA.

The value in use exceeds the above carrying values for each CGU, therefore no impairment is considered necessary. 

40

 
 
 
 
 
 
 
 
 
 
 
 
Notes (continued)
(forming part of the ﬁ nancial statements)

13  Deferred tax assets and liabilities 

Recognised deferred tax assets and liabilities 

The amount of temporary diﬀ erences, unused tax losses and tax credits for which no deferred tax asset is recognised is set out below.  The asset 

would be recovered if oﬀ set against future taxable proﬁ ts of the group.  

The Group has an arrangement with the vendors of Cambria Automobiles (South East) Limited, which was acquired in the year ended 31 August 

2008, under which an amount equal to any tax beneﬁ t received by the Group in relation to tax losses that existed at the date of acquisition 

must be paid to the vendors as additional consideration. At the date of acquisition, the utilisation of tax losses was not probable and therefore 

no deferred tax asset was recognised as part of the acquisition accounting, and the fair value of the liability for contingent consideration was 

immaterial. Subsequent to the acquisition, in the period to 31 August 2009, the utilisation of pre-acquisition losses became probable and, as a 

result, a deferred tax asset has been recognised. A liability for the contingent consideration payable to the vendors has been recognised at its fair 

value. Comparative amounts have been represented in accordance with IAS 1.

Tax value of loss carry-forwards

Tax assets

Net of tax liabilities

Recognised net tax assets

Assets

2010

£000

508

508

-

508

2009

£000

645

645

-

645

Unrecognised deferred tax assets and liabilities 

In the current year, the deferred tax  liability relating to plant, property and equipment and provisions  has  not  been recognised as  it  is  not 

material. In prior year, this was a deferred tax asset, however it was also unrecognised as it will reverse after the utilisation of losses which is 

anticipated to be beyond the Group’s future forecasts.

Property, plant and equipment

Provisions

Tax value of loss carry-forwards

Tax (liabilities)/assets

Net of tax liabilities

Unrecognised net tax (liabilities)/assets

Assets

2010

£000  

(407)

132

261

(14)

-

(14)

2009

£000

(450)

176

649

375

-

375

41

 
 
              
              
 
 
 
 
 
Notes (continued)
(forming part of the ﬁ nancial statements)

14  Inventories

Vehicle consignment stock

Motor vehicles

Parts and other stock

2010

£000

40,040

20,044

2,351

62,435

2009

£000

24,090

17,879

1,554

43,523

Included within inventories is £nil (2009: £nil) expected to be recovered in more than 12 months.
Raw materials, consumables and changes in ﬁ nished goods and work in progress recognised as cost of sales in the year amounted to £341 million 
(2009: £215 million).  

15  Trade and other receivables

Trade receivables

Prepayments and other debtors

2010

£000

5,443

2,495

7,938

Included within trade and other receivables is £nil (2009: £nil) expected to be recovered in more than 12 months.

16  Cash and cash equivalents/ bank overdrafts

Cash and cash equivalents per balance sheet

2010

£000

9,266

2009

£000

5,428

1,772

7,200

2009

£000

5,777

Cash and cash equivalents per cash ﬂ ow statement

9,266

5,777

42

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes (continued)
(forming part of the ﬁ nancial statements)

17  Other interest-bearing loans and borrowings

This  note  provides  information  about  the  contractual  terms  of  the  Group’s  interest-bearing  loans  and  borrowings,  which  are  measured  at 

amortised cost. For more information about the Group’s exposure to interest rate risk, see note 22.

Non-current liabilities

Secured bank loans

Current liabilities

Secured bank loans

Terms and debt repayment schedule  

All debt is in GBP currency

2010

£000

2009

£000

12,672

11,138

1,024

294

Nominal 
interest rate

Year of Maturity

Face Value and 
Carrying Amount

Face Value and 
Carrying Amount

Loan 31/07/2006

Loan 01/08/2007

Loan 31/12/2007

Loan 01/03/2010

  Base  +1.25%

  Base  +1.25%

  LIBOR  +1.75%

  LIBOR  +3.00%

2019

2020

2020

2017

Finance lease liabilities

There were no ﬁ nance lease liabilities at 31 August 2009 or 2010.

2010

£000

2,530

725

7,866

2,575

2009

£000

2,841

725

7,866

-

13,696

11,432

43

 
 
 
 
 
 
 
             
             
Notes (continued)
(forming part of the ﬁ nancial statements)

18  Trade and other payables

Current

Vehicle consignment creditor

Other trade payables

Non-trade payables and accrued expenses

Vehicle funding

2010

£000

46,148

8,881

7,820

12,047

74,896

2009

£000

27,303

8,263

7,572

              9,101

52,239

Included within trade and other payables is £ nil (2009: £nil) expected to be settled in more than 12 months.

19  Employee beneﬁ ts

Pension plans

Deﬁ ned contribution plans 

The Group operates a number of deﬁ ned contribution pension plans.
The total expense relating to these plans in the current year was £161,000 (2009: £161,000).

20  Provisions

Restructuring provision

Balance at 1 September 2009

Provisions used during the year

Balance at 31 August 2010

Current

Non current

Balance at 31 August 2009

Current

Non current

Balance at 31 August 2010

Onerous leases/ 
contracts

Staff costs

£000

£000

236

(44)

192

-

236

236

41

151

192

344

(43)

301

344

-

344

301

-

301

IT

£000

108

(108)

-

108

-

108

-

-

-

Total

£000

688

(195)

493

452

236

688

342

151

493

The onerous lease provision is being released against the costs incurred on the relevant lease.  The provision will be fully released by 2015.  All 

other provisions are expected to be utilised by 31 August 2011.

44

 
 
 
 
 
 
             
 
             
 
            
  
      
        
             
 
       
       
           
   
    
          
           
   
             
 
             
 
        
      
              
           
   
          
    
         
     
             
 
              
              
             
 
           
   
      
        
             
 
           
   
Notes (continued)
(forming part of the ﬁ nancial statements)

21  Capital and reserves 

Share capital

Authorised

‘A’ Ordinary shares of 10 pence each

‘B’ Ordinary shares of £1 each

‘C’ Ordinary shares of 1 pence each

‘D’ Ordinary shares of 1 pence each

‘E’ Ordinary shares of 1 pence each

Ordinary shares of 10 pence each

Allotted, called up and fully paid

‘A’ Ordinary shares of 10 pence each

‘B’ Ordinary shares of £1 each

‘C’ Ordinary shares of 1 pence each

‘D’ Ordinary shares of 1 pence each

‘E’ Ordinary shares of 1 pence each

Ordinary shares of 10 pence each

Shares classiﬁ ed in shareholders funds

2010

£000

-

-

-

-

-

10,000  

10,000              

-

-

-

-

-

10,000  

10,000             

10,000

10,000

2009

£000

17

166

135

-

-

-

318

17

166

135

-

-

-

318

318

318

Prior to the admission to AIM, on 26 March 2010, the A, B, C, D and E shares and the Share Premium attached to them were all converted into 

100,000,000 Ordinary Shares of 10p each giving the Company an issued share capital of £10,000,000 and a share premium of £799,000.  All of 

the shares rank pari passu, and no shareholder enjoys diﬀ erent or enhanced voting rights from any other shareholder. All shares are eligible for 

dividends and rank equally for dividend payments.

45

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes (continued)
(forming part of the ﬁ nancial statements)

22  Financial instruments

22 (a) Fair values of ﬁ nancial instruments

Trade and other receivables

The fair value of trade and other receivables, is estimated as the present value of future cash ﬂ ows, discounted at the market rate of interest at 

the balance sheet date if the eﬀ ect is material.

Trade and other payables

The fair value of trade and other payables is estimated as the present value of future cash ﬂ ows, discounted at the market rate of interest at the 

balance sheet date if the eﬀ ect is material.

Cash and cash equivalents

The fair value of cash and cash equivalents is estimated as its carrying amount where the cash is repayable on demand.  Where it is not repayable 

on demand then the fair value is estimated at the present value of future cash ﬂ ows, discounted at the market rate of interest at the balance 

sheet date.

Interest-bearing borrowings

Fair value, which after initial recognition is determined for disclosure purposes only, is calculated based on the present value of future principal 

and interest cash ﬂ ows, discounted at the market rate of interest at the balance sheet date.  

The interest rates used to discount estimated cash ﬂ ows, where applicable are based on the weighted cost of capital and were as follows:

Loans and borrowings

 Fair values

2010

%

2.2

2009

%

2.1

The fair values for each class of ﬁ nancial assets and ﬁ nancial liabilities together with their carrying amounts shown in the balance sheet are as follows:

As at 31 August 2010

As at 31 August 2009

£000

£000

Financial assets

Loans and receivables at amortised cost including cash and cash equivalents

Trade receivables(net) (note 15)

Other receivables (note 15)

Cash and cash equivalents

5,443

2,495

9,266

5,428

1,772

5,777

Total Financial assets

17,204

12,977

Financial liabilities

Financial liabilities at amortised cost

Other interest-bearing loans and borrowings (note 17)

Trade and other payables (note 18)

Total ﬁ nancial liabilities

13,696

74,824

88,520

11,432

52,239

63,671

The Directors consider the carrying amount of the Group’s ﬁ nancial assets and ﬁ nancial liabilities, as detailed above, approximate their fair value.

46

 
 
 
 
 
 
 
 
 
 
Notes (continued)
(forming part of the ﬁ nancial statements)

22 (b) Credit risk

Credit risk management 

The Group is exposed to credit risk primarily in respect of its trade receivables and ﬁ nancial assets.  Trade receivables are stated net of provision 

for estimated impairment losses.  Exposure to credit risk in respect of trade receivables is mitigated by the Group’s policy of only granting credit 

to certain customers after an appropriate evaluation of risk coupled with the ﬁ ndings from external reference agencies.  Credit risk arises in 

respect of amounts due from vehicle manufacturers in relation to bonuses and warranty receivables.  This risk is mitigated by the number of 

manufacturers for which the group holds franchises, procedures to ensure timely collection of debts and management’s belief that it does not 

expect any manufacturer to fail to meet its obligations.  The maximum exposure to credit risk is represented by the carrying amount of each 

ﬁ nancial asset in the statement of ﬁ nancial position.  

Exposure to credit risk

The carrying amount of trade receivables represents the  maximum credit exposure. Therefore, the  maximum exposure to credit risk at the 
balance sheet date was £5,443,000 (2009: £5,428,000) being the total of the carrying amount of ﬁ nancial assets, excluding equity investments, 
shown in the table below.

The maximum exposure to credit risk for trade receivables at the balance sheet date by geographic region was:

United Kingdom

2010

£000

5,443

The maximum exposure to credit risk for trade receivables at the balance sheet date by type of counterparty was:

Vehicle debtors

Non vehicle debtors

Manufacturer debtors

2010

£000

2,475

2,029

939

5,443

2009

£000

5,428

2009

£000

3,247

1,699

482

5,428

Credit quality of ﬁ nancial assets and impairment losses

The ageing of trade receivables at the balance sheet date is given below. The Group’s policy is to provide for all debts which are past due. The 

directors consider the balance to be recoverable based on credit terms and post balance sheet receipts. 

Current 0-30 days

31-60 days

61-120 days

More than 120 days

Gross

2010  

£000

4,751

663

141

23

5,578

Impairment

2010

£000

35

8

73

19

135

Gross

2009  

£000

4,668

974

182

-

5,824

Impairment

2009

£000

21

193

182

-

396

47

 
 
 
 
 
 
 
 
 
 
 
 
             
             
             
             
Notes (continued)
(forming part of the ﬁ nancial statements)

22 (b) Credit risk (continued)

The movement in the allowance for impairment in respect of trade receivables during the year was as follows:

Balance at 31 August 2009

Impairment loss reversed

Balance at 31 August 2010

£000

396

(261)

135

The allowance account for trade receivables is used to record impairment losses unless the Group is satisﬁ ed that no recovery of the amount 

owing is possible; at that point the amounts considered irrecoverable are written oﬀ  against the trade receivables directly.

22 (c) Liquidity risk

Liquidity risk management 

Liquidity risk is the risk that the Group will not be able to meet its ﬁ nancial obligations as they fall due.  Liquidity is managed by the Group’s 

central  treasury  function  within  policy  guidelines  set  by  the  Board  with  primes  areas  of  focus  being  liquidity  and  interest  rate  exposure.  

The group is ﬁ nanced primarily by bank loans, vehicle stocking credit lines and operating cash ﬂ ow.  The directors have assessed the future 

funding requirements of the Group and compared them to the level of committed available borrowing facilities.  These committed facilities 

are maintained at levels in excess of planned requirements and are in addition to short term uncommitted facilities that are also available to 

the  Group.   The assessment  included a  review of  ﬁ nancial  forecasts,  ﬁ nancial  instruments and cash  ﬂ ow projections.   These  forecasts and 

projections show that the Group, taking account of reasonably possible scenarios, should be able to operate within the level of its borrowing 

facilities for the foreseeable future.       

The following are the contractual maturities of ﬁ nancial liabilities, including estimated interest payments and excluding the eﬀ ect of netting 
agreements: Interest is payable on loans of £3,255,000 (2009: £3,566,000) at bank base rate plus 1.25%, loans of £7,866,000 (2009: £7,866,000) at 
LIBOR plus 1.75% and on loans of £2,576,000 (2009: £nil) at LIBOR plus 3%.

2009

Carrying 
amount

Contractual 
cash ﬂ ows

 1 year or 
less

1 to <2 years

2 to <5 years

5 years and 
over

£000

£000

£000

£000

£000

£000

Non-derivative ﬁ nancial liabilities

Secured bank loans

11,432

12,831

590

1,105

3,814

7,322

2010

Carrying 
amount

Contractual 
cash ﬂ ows

 1 year or 
less

1 to <2 years

2 to <5 years

5 years and 
over

£000

£000

£000

£000

£000

£000

Non-derivative ﬁ nancial liabilities

Secured bank loans

13,696

15,267

1,384

1,619

2,902

9,362

48

Notes (continued)
(forming part of the ﬁ nancial statements)

22 (d) Market risk

Financial risk management 

Market risk is the risk that changes in market prices, such as interest rates will aﬀ ect the Group’s income or the value of its holdings of ﬁ nancial instruments

Market risk - Foreign currency risk

The Group does not have any exposure to foreign currency risk 

Market risk – Interest rate risk

Proﬁ le

At the balance sheet date the interest rate proﬁ le of the Group’s interest-bearing ﬁ nancial instruments was:

Variable rate instruments

Cash and cash equivalents

Vehicle funding

Loans and overdrafts

2010

£000

9,266

(12,047)

(13,696)

2009

£000

5,777

(9,101)

(11,432)

(16,477)

(14,756)

The objectives of the Group’s interest rate policy are to minimise interest costs.  The Group does not actively manage cash ﬂ ow interest risk as 

the directors believe that the retail sector in which the Group operates provides a natural hedge against interest rate movements.  Consequently, 

it is Group policy to borrow on a ﬂ oating rate basis.

Whilst there are no hedging instruments, the Board reviews its hedging policy on a regular basis.

Sensitivity analysis 

A change of 0.5 basis points in interest rates at the balance sheet date would have decreased equity and proﬁ t or loss by the amounts shown below. 

This analysis assumes that all other variables, in particular foreign currency rates, remain constant and considers the eﬀ ect of ﬁ nancial instruments 

with variable interest rates, ﬁ nancial instrument at fair value through proﬁ t or loss or available for sale with ﬁ xed interest rates and the ﬁ xed rate 

element of interest rate swaps. The analysis is performed on the same basis for comparative periods.

Equity

Decrease

Proﬁ t or loss

Decrease

2010

£000

130

130

2009

£000

93

93

49

 
 
 
 
 
 
Notes (continued)
(forming part of the ﬁ nancial statements)

22 (e) Capital management

Prior to each acquisition, the Board considers its funding options and the appropriate mix of secured debt and equity.

The Group’s primary objective when managing capital is to safeguard the Group’s ability to continue as a going concern in order to provide 

returns for shareholders and beneﬁ ts to other stakeholders.  The Group must ensure that suﬃ  cient capital resources are available for working 

capital requirements and meeting principal and interest payment obligations as they fall due.

Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio, which is calculated as net debt divided by 

total capital.  Net debt is calculated as total borrowings (including current and non-current borrowings as shown in the statement of ﬁ nancial 

position) less cash and cash equivalents.  Total capital is calculated as total shareholders’ equity.

The gearing ratios for each year are as follows:

Total borrowings

Less: cash and cash equivalents

Net debt

Total equity

Gearing ratio

23  Operating leases

Non-cancellable operating lease rentals are payable as follows: 

Less than one year

Between one and ﬁ ve years

More than ﬁ ve years

As of 31 August 2010

As of 31 August 2009

£000

13,696

(9,266)

4,430

16,107

£000

11,432

(5,777)

5,655

14,085

27.5%  

40.1%

2010

£000

2,434

8,197

25,617

36,248

2009

£000

2,105

8,421

22,653

33,179

The Group leases a number of motor dealership sites under operating leases.  Land and buildings have been considered separately for lease classiﬁ cation.  

During the year £2,394,000 was recognised as an expense in the income statement in respect of operating leases (2009: £2,178,000).

50

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes (continued)
(forming part of the ﬁ nancial statements)

24  Contingencies

The Group is jointly and severally liable in respect of value added tax liabilities arising in other group undertakings.  The related fellow subsidiary 
undertakings and the parent company were is a repayment situation at 31 August 2009 and 2010.

In recognition of the Cambria Automobiles plc group bank and used vehicle funding facilities, the following companies have entered into a joint 
agreement to guarantee liabilities with banks and ﬁ nance houses of the motor manufacturers that provide new and used vehicles to the group: 

Cambria Automobiles plc, Cambria Automobiles Properties Limited, Cambria Automobiles Group Limited, Cambria Automobiles Acquisitions 
Limited, Cambria Automobiles (Swindon) Limited, Grange Motors (Swindon) Limited, Thoranmart Limited, Cambria Automobiles (South East) 

Limited, Grange Motors (Brentwood) Limited,  Invicta Motors Limited, Invicta Motors (Maidstone) Limited and Cambria Vehicle Services Limited.

Intra-group guarantees are accounted for as insurance contracts.

25  Related parties

Identity of related parties with which the Group has transacted

Key management personnel are considered to be the board of directors for the purposes of this disclosure.

Transactions with key management personnel

At the year end, the Directors of the Company and their immediate relatives controlled 49.1% per cent of the voting shares of the Company. 

The compensation of key management personnel is as follows:

Directors’ emoluments

Salaries

Annual bonus

Non-contractual bonuses 

The emoluments consist of:

Directors’ emoluments

James Mullins

Rodney Smith

Mark Lavery

Warren Scott

Sir Peter Burt

Michael Burt

Salaries

2010

£000

111

81

270

25

10

10

507

2010

£000  

507

525

910

1,942

Total

2010

£000

319

288

1,290

25

10

10

Contractual 
Bonus

Non-Contractual 
Bonus

2010

£000

125

125

660

-

-

-

2010

£000

83

82

360

-

-

-

525

910

1,942

2009

£000

417

255

-

672

Total

2009

£000

155

117

400

-

-

-

672

All directors beneﬁ ted from qualifying third party indemnity provisions during the ﬁ nancial period.

During the year Mark Lavery and James Mullins each bought 4 vehicles from the Group and each sold 4 vehicles back to the Group.  There were 

no outstanding balances due to the Group at the year end.

51

 
        
              
              
              
    
          
Notes (continued)
(forming part of the ﬁ nancial statements)

25  Related parties  (continued)

Other related party transactions

The Company is quoted on the AIM Market. Promethean own 33% of the company.  During the year the company paid £44,000 (2009: £15,000) 
in management fees to Promethean prior to admission.

26  Ultimate parent company and parent company of larger group

In the opinion of the directors, the distribution of the ordinary shares and the rights attributing themselves to them means that there is no 

overall controlling party of the company.

27  Illustrative explanation of differences between UK GAAP and Adopted IFRS  

As stated in note 1, these are the Group’s second consolidated ﬁ nancial statements prepared in accordance with Adopted IFRS.

The  Group  has adjusted amounts  reported  previously  in  ﬁ nancial  statements  prepared  in accordance with  its old  basis of accounting  (UK 

GAAP). An illustration of the diﬀ erences between UK GAAP to Adopted IFRS in respect of the Group’s ﬁ nancial position, ﬁ nancial performance 

and cash ﬂ ows is set out in the following tables and the notes that accompany the tables.

Note 13 explains the change in comparative information from that disclosed in the admission document.

52

Notes (continued)
(forming part of the ﬁ nancial statements)

27  Illustrative explanation of differences between UK GAAP and Adopted IFRS (continued)

1 September 2008

31 August 2009

UK GAAP

Effect of 
transition 
to Adopted 
IFRS

Adopted 
IFRS

UK GAAP

Adopted 
IFRS

Effect of 
transition 
to Adopted 
IFRS

Note

£000  

£000  

£000  

£000  

£000  

£000

a

c

c

c

b

b

c

Non-current assets

Property, plant and equipment

Goodwill

Other intangibles

Deferred tax asset

Current assets

Inventories

Trade and other receivables

Cash and cash equivalents

Total assets

Current liabilities

Other interest-bearing loans and borrowings

Trade and other payables

Provisions

Non-current liabilities

Other interest-bearing loans and borrowings

Provisions

Other payables

Total liabilities

Net assets

Equity attributable to equity holders of 
the parent 

Share capital

Share premium

Retained earnings

Total equity 

21,773

(53)

-

-

(13)

21,760

21,598

(132)

21,466

399  

28  

-

346  

28  

-

221  

-

-

125  

132  

645  

346

132

645

21,720

414

22,134

21,819

770

22,589

41,866

8,335

2,443

52,644

-

-

-

-

41,866

43,523

-

43,523

8,335

2,443

7,845

5,777

(645)

-

7,200

5,777

52,644

57,145

(645)

56,500

74,364

414

74,778

78,964

125

79,089

(26)

(49,247)

-

-

(26)

(294)

(49,247)

(52,884)

-

(1,598)

(1,598)

-

-

645

(452)

(294)

(52,239)

(452)

(49,273)

(1,598)

(50,871)

(53,178)

193

(52,985)

(26)

(1,598)

-

-

1,598  

-

(26)

-

-

(294)

(688)

-

-

452  

(645)

(294)

(236)

(645)

(13,030)

1,598

(11,432)

(11,826)

(193)

(12,019)

(62,303)

-

(62,303)

(65,004)

-

(65,004)

12,061

414

12,475

13,960

125

14,085

318  

10,481

1,262

-

-

414

318  

318  

10,481

1,676

10,481

3,161

-

-

125

318

10,481

3,286

12,061

414

12,475

13,960

125

14,085

53

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes (continued)
(forming part of the ﬁ nancial statements)

27  Illustrative explanation of differences between UK GAAP and Adopted IFRS  (continued)

Notes to the reconciliation of equity 

a)  Goodwill and intangibles

Goodwill

UK GAAP

Reverse amortisation on positive goodwill

Reverse amortisation on negative goodwill

Transaction costs written off under IFRS 3 (2008)

Reclassiﬁ ed as intangibles

Negative goodwill written back to retained earnings

Adopted IFRS

Other intangible assets

UK GAAP

Reclassify software from property, plant, & equipment

Goodwill reclassiﬁ ed as intangible

Amortisation

Note

i

i

ii

Iii

Iv

v

iii

iii

2009 

£000

221

571

(881)

(1,652)

(176)

2,263

346

132

176

(176)

132

2008 

£000

(53)

316

(352)

(1,652)

(176)

2,263

346

13

176

(161)

28

i)  Under adopted IFRS goodwill is not amortised but is tested annually for impairment.

ii)  On ﬁ rst time adoption IFRS 1 allows the group to apply IFRS 3 (2008) to all previous acquisitions.  The impact of this is to write oﬀ  all 

transaction costs arising on business combinations.

iii)  IAS 38 and IFRS 3 require intangible assets acquired as part of an acquisition to be separately identiﬁ ed on the balance sheet.  Intangibles 

reclassiﬁ ed represent the fair value of orders existing at the date of acquisition and customer lists.  Amortisation has been charged on 

these assets.

iv)  Under adopted IFRS, if the cost of acquisition is less than the fair value of the identiﬁ able assets and liabilities acquired, the diﬀ erence is 

recognised directly in the income statement. 

v)  Under IAS 38 software is classiﬁ ed as an intangible ﬁ xed asset.

b)  Under adopted IFRS provisions are classiﬁ ed as current and non-current provisions.

c)  Under UK GAAP a deferred tax asset was recognised in the year ended 31 August 2009 in respect of a contingent consideration on a business 

combination in the prior year in relation to payment for tax losses to the vendor.  Under IFRS 12, the deferred tax assets are classiﬁ ed as non-

current assets rather than current assets. 

54

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes (continued)
(forming part of the ﬁ nancial statements)

27  Illustrative explanation of differences between UK GAAP and Adopted IFRS  (continued)

Reconciliation of proﬁ t/loss for the year ended 31 August 2009

Note

UK GAAP

Revenue

Cost of sales

Gross proﬁ t

Other operating income

Operating expenses

d

Operating proﬁ t before net ﬁ nancing costs

Proﬁ t on sale of ﬁ xed assets

Financial income

Financial expenses

Net ﬁ nancing expense

Proﬁ t before tax

Taxation

Proﬁ t for the year

Notes to the reconciliation of proﬁ t/loss 

e)  Operating expenses

£000

255,466

(212,675)

42,791

-

(39,134)

3,657

3

41

(1,370)

(1,326)

2,331

  (432)

1,899

2009

Effect of
 transition to
 Adopted IFRS

£000

-

-

-

3

(289)

(286)

(3)

-

-

(3)

(289)

-

(289)

Operating expenses

UK GAAP

Reverse amortisation on positive goodwill

Reverse amortisation on negative goodwill

Amortisation of intangibles

Reclassiﬁ cation of Cost of Sales in line with segmental reporting

Adopted IFRS

*

*

**

***

Reclassiﬁ cation

Adopted IFRS

£000

255,466

(5,656)

(218,331)

(5,656)

5,656

37,135

3

(33,767)

3,371

-

41

(1,370)

(1,329)

2,042

(432)

1,610

2009

£000

39,134

(255)

529

15

(5,656)

33,767

  *  Under adopted IFRS goodwill is not amortised but is tested annually for impairment.   

  **  IAS 38 and IFRS 3 require intangible assets acquired as part of an acquisition to be separately identiﬁ ed on the balance sheet.  Intangibles    

  reclassiﬁ ed represent the fair value of orders existing at the date of acquisition and customer lists.  Amortisation has been charged on these assets.

 ***  The Board has reclassiﬁ ed certain costs that were historically shown as administrative expenses into cost of sales.

Explanation of material adjustments to the cash ﬂ ow statement

There are no material diﬀ erences between the cash ﬂ ow statement presented under Adopted IFRSs and the cash ﬂ ow statement presented under UK GAAP.

55

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Company Balance Sheet
At 31 August 2010

Note

2010

2009

£000

£000

£000

£000

Fixed assets

Tangible Fixed Assets

Investments

Current assets

Stock 

Debtors 

Cash at bank and in hand

5

6

7

8

Creditors: amounts falling due within one year 

9

Net current assets

Total assets less current liabilities

Provisions for liabilities

Net assets

Capital and reserves

Called up share capital

Share premium account

Proﬁ t and loss account

Shareholders’ funds

10

11

12

12

202

666

339

290

11,987

12,616

(1,623)

163

666

868

829

263

853

9,921

11,037

(1,272)

10,993

11,861

-

11,861

10,000

799

1,062

11,861

9,765

10,594

-

10,594

318

10,481

(205)

10,594

These ﬁ nancial statements were approved by the board of directors on 26 November 2010 and were signed on its behalf by:

M J J Lavery
Director

Company number: 05754547

56

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Company Reconciliation of movements in shareholders’ funds
for the year ended 31 August 2010

Note

Company

Company

Proﬁ t/(loss) for the ﬁ nancial year

12

Net increase/(decrease) to shareholders’ funds

Opening shareholders’ funds

Closing shareholders’ funds

2010

£000

1,267

1,267

10,594

11,861

2009

£000

(126)

(126)

10,720

10,594

57

 
 
 
 
Notes (continued)

1  Accounting policies

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the ﬁ nancial 

statements.

Going Concern

The directors believe that the company is well placed to manage its business risks successfully despite the current uncertain economic outlook

The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable 

future. Thus they continue to adopt the going concern basis in preparing the annual ﬁ nancial statements

Further information regarding the company’s business activities together with the factors likely to aﬀ ect its future development, performance 

and position is set out in the Directors Report on page 11.

Basis of preparation

The ﬁ nancial statements have been prepared in accordance with applicable accounting standards and under the historical cost accounting rules.  

Under section 408 of the Companies Act 2006 the company is exempt from the requirement to present its own proﬁ t and loss account.

Under Financial Reporting Standard 1 the Company is exempt from the requirement to prepare a cash ﬂ ow statement on the grounds that the 

Group ﬁ nancial statements include the Company in its own published consolidated ﬁ nancial statements.

The Company has taken advantage of the exemption contained in FRS 8 and has therefore not disclosed transactions or balances with entities 

which form part of the group.  

Fixed assets and depreciation

Depreciation is provided to write oﬀ  the cost less the estimated residual value of tangible ﬁ xed assets by instalments over their estimated useful 

lives of each part of an item of property, plant and equipment. Land is not depreciated. The estimated useful lives are as follows:

•  freehold buildings 

50 years

•  plant and machinery 

5 to 10 years

•  ﬁ xtures and ﬁ ttings 

5 to 10 years

•  computer equipment 

3 to 5 years

No depreciation is provided on freehold land.

Investments

Investments in subsidiary undertakings are stated at cost less amounts written oﬀ . 

Stocks

Stocks are stated at the lower of cost and net realisable value.  In determining the cost of motor vehicles, the actual amount paid to date for each 

car is used, for spare parts and service items stocks are valued at invoiced cost on a FIFO basis.  An appropriate provision is made for obsolete 

or slow moving items.

New vehicles on consignment from manufacturers are included in the balance sheet where it is considered that the company bears the risks and 

rewards or ownership.

Consignment  stock  is  held  for  a  maximum  period  (which  varies  between  manufacturers)  before  becoming  due  for  payment.  Part  of  the 

consignment period is interest free and the remaining period are interest bearing (periods varies between manufacturers). 

58

Notes (continued)

Taxation

The charge for taxation is based on the proﬁ t for the year and takes into account taxation deferred because of timing diﬀ erences between the 

treatment of certain items for taxation and accounting purposes.

Deferred tax is recognised, without discounting, in respect of all timing diﬀ erences between the treatment of certain items for taxation and 

accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by FRS 19.

Classiﬁ cation of ﬁ nancial instruments issued by the Group

Following the adoption of FRS 25, ﬁ nancial instruments issued by the Group are treated as equity (i.e. forming part of shareholders’ funds) only 

to the extent that they meet the following two conditions: 

a)  they include no contractual obligations upon the Company (or Group as the case may be) to deliver cash or other ﬁ nancial assets or to exchange 

ﬁ nancial assets or ﬁ nancial liabilities with another party under conditions that are potentially unfavourable to the Company (or Group); and 

b)  where the instrument will or may be settled in the Company’s own equity instruments, it is either a non-derivative that includes no obligation 

to deliver a variable number of the Company’s own equity instruments or is a derivative that will be settled by the Company’s exchanging a 

ﬁ xed amount of cash or other ﬁ nancial assets for a ﬁ xed number of its own equity instruments.

To the extent that this deﬁ nition is not met, the proceeds of issue are classiﬁ ed as a ﬁ nancial liability.  Where the instrument so classiﬁ ed takes 

the legal form of the Company’s own shares, the amounts presented in these ﬁ nancial statements for called up share capital and share premium 

account exclude amounts in relation to those shares.  

Finance payments associated with ﬁ nancial liabilities are dealt with as part of interest payable and similar charges.  Finance payments associated 

with  ﬁ nancial  instruments  that  are  classiﬁ ed  as  part  of  shareholders’  funds  (see  dividends  policy),  are  dealt  with  as  appropriations  in  the 

reconciliation of movements in shareholders’ funds.  

Dividends on shares presented within equity

Dividends unpaid at the balance sheet date are only recognised as a liability at that date to the extent that they are appropriately authorised and are 

no longer at the discretion of the Company.  Unpaid dividends that do not meet these criteria are disclosed in the notes to the ﬁ nancial statements. 

59

Notes (continued)

2  Remuneration of directors

Directors’ emoluments

Salaries

Annual bonus

Non-contractual bonuses 

The emoluments in respect of the highest paid director were:

Directors’ emoluments

Salaries

Annual bonus

Non-contractual bonuses 

All directors beneﬁ ted from qualifying third party indemnity provisions during the ﬁ nancial period

2010

£000

507

525

910

1,942

2010

£000

270

360

660

1,290

2009

£000

417

255

-

672

2009

£000

250

150

-

400

60

 
 
 
 
 
 
 
 
Notes (continued)

3  Staff numbers and costs

The average number of persons employed by the Company (including directors) during the period, analysed by category, was as follows:

Number of employees

Administration

The aggregate payroll costs of these persons were as follows:

Wages and salaries

Social security costs

Non-recurring listing bonuses

Non-recurring social security costs

Other pension costs

4  Dividends

The aggregate amount of dividends received compromises:

Aggregate amount of dividends received in the ﬁ nancial year

Company

2010

Company

2009

35

17

Company

2010

£000

2,724

291

1,025

131

10

Company

2009

£000

1,209

244

-

-

1

4,181

1,454

2010

2,610

2009

The aggregate amount of dividends proposed and not recognised as income at the year end is £nil (2009: £nil ).

61

 
 
 
 
 
 
 
 
 
Computer equipment

£000

Total

£000

178

109

287

15

70

85

202

163

178

109

287

15

70

85

202

163

Notes (continued)

5  Tangible ﬁ xed assets

Company

Cost 

At 1 September 2009

Additions

At 31 August 2010

Depreciation

At 1 September 2009

Charge for year

At end of year

Net book value

At 31 August  2010

31 August 2009

62

Notes (continued)

6  Fixed asset investments

Company

Cost and net book value

At 1 September 2008 and 31 August 2010

Shares in group 
undertakings

£000

666

The undertakings in which the Company’s interest at the year end is more than 20% are as follows:

Country of
incorporation

Principal activity

Class and percentage of 
shares held

Subsidiary undertakings

Cambria Automobiles Group Limited

England and Wales

Holding Company

Cambria Automobiles Acquisitions Limited **

England and Wales

Investment Company

100% Ordinary

100% Ordinary

Cambria Automobiles Properties Limited **

England and Wales

Property Company

100% Ordinary

Cambria Automobiles (Swindon) Limited *

England and Wales

Grange Motors (Swindon) Limited * 

Thoranmart Limited *

Cambria Vehicle Services Limited*

England and Wales

England and Wales

England and Wales

Cambria Automobiles (South East) Limited*

England and Wales

Grange Motors (Brentwood) Limited***

Invicta Motors Limited***

Deeslease Limited***

Dove Group Limited***

England and Wales

England and Wales

England and Wales

England and Wales

Translease Vehicle Management Limited***

England and Wales

Motor retailer

Motor retailer

Motor retailer

Motor retailer

Motor retailer

Motor retailer

Motor retailer

Dormant

Dormant

Dormant

Invicta Motors (Maidstone) Limited*

England and Wales

Motor retailer

100% Ordinary & Preference

100% Ordinary

100% Ordinary

100% Ordinary

100% Ordinary 

100% Ordinary 

100% Ordinary & Preference

100% Ordinary 

100% Ordinary 

100% Ordinary 

100% Ordinary

  *  Owned directly by Cambria Automobiles Acquisitions Limited

  **  Owned directly by Cambria Automobiles Group Limited

 ***  Owned directly by Cambria Automobiles (South East) Limited

7  Stocks

Motor vehicles

2010

£000

339

2009

£000

263

63

Notes (continued)

8  Debtors

Trade debtors

Amounts owed by group undertakings

Prepayments and accrued income

9  Creditors: amounts falling due within one year

Amounts owed to group undertakings

Trade creditors

Accruals and deferred income

2010

£000

77

40

173

290

2010

£000

306

494

823

1,623

2009

£000

256

519

78

853

2009

£000

77

486

709

1,272

64

              
              
              
              
Notes (continued)

10  Provisions for liabilities

Deferred Taxation

At 1 September 2009

Movement in period

At 31 August 2010

The elements of deferred taxation are as follows:

Difference between accumulated depreciation and capital allowances

Total deferred tax

Unrecognised deferred tax asset

Recognised deferred tax asset

2010

£000

11

11

(11)

-

£000

Company

-

-

-

2009

£000

13

13

(13)

-

The deferred tax asset not recognised, which consists primarily of tax losses carried forward, would be recovered if set oﬀ  against future proﬁ ts 

of the company.

65

           
       
         
         
           
       
         
         
              
Notes (continued)

11  Called up share capital

Authorised

‘A’ Ordinary shares of 10 pence each

‘B’ Ordinary shares of £1 each

‘C’ Ordinary shares of 1 pence each

‘D’ Ordinary shares of 1 pence each

‘E’ Ordinary shares of 1 pence each

 Ordinary shares of 10 pence each

Allotted, called up and fully paid

‘A’ Ordinary shares of 10 pence each

‘B’ Ordinary shares of £1 each

‘C’ Ordinary shares of 1 pence each

‘D’ Ordinary shares of 1 pence each

‘E’ Ordinary shares of 1 pence each

 Ordinary shares of 10 pence each

Shares classiﬁ ed as liabilities

Shares classiﬁ ed in shareholders funds

2010

£000

-

-

-

-

-

10,000              

10,000

-

-

-

-

-

10,000              

10,000

-

10,000

10,000

2009

£000

17

166

135

-

-

-

318

17

166

135

-

-

-   

318

-

318

318

Prior to the admission to trading on AIM, on 26 March 2010, the A, B, C, D and E shares and the Share Premium attached to them were all 

converted into 100,000,000 Ordinary Shares of 10p each giving the Company an issued share capital of £10,000,000 and a share premium of 

£799,000.  All of the shares rank pari passu, and no shareholder enjoys diﬀ erent or enhanced voting rights from any other shareholder. All shares 

are eligible for dividends and rank equally for dividend payments.

66

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes (continued)

12  Share premium and reserves

At 1 September 2009

Converted into ordinary share capital

Proﬁ t for the year

At 31 August 2010

13  Related party disclosures

Share premium account

Proﬁ t and loss account

£000

10,481

(9,682)

-

799

£000

(205)

-

1,267

1,062

The Company is quoted on the AIM Market. Promethean own 33% of the Company.  During the year the Company paid £44,000 (2009: £15,000) 
in management fees to Promethean prior to admission.

14  Ultimate parent company and parent undertaking of larger group

In the opinion of the directors, the distribution of the ordinary shares and the rights attributing themselves to them means that there is no 

overall controlling party of the Company.

67