H1 Performance
The UK new and used car markets remain challenging with volume pressures and well documented cost headwinds for the retail sector, together with recent margin pressure in the used car market. During the Period, the Group outperformed the market in both retail and fleet new vehicle unit sales, continued strong growth in used vehicle unit sales and achieved further growth in aftersales revenues. This helped mitigate the impact of the challenging market conditions and the Group expects to deliver an H1 underlying profit before tax in line with the Board's expectations.
Financial Position
The Group delivered strong cash generation during the Period and expects to report a positive net cash position of approximately £5m at 30 June 2019 (31 December 2018: net debt of £5.1m).
This was achieved notwithstanding the previously reported £6.0m paid to complete the process of eliminating all outstanding historic defined benefit pension liabilities, the £3.5m investment made in the acquisition of six ŠKODA dealerships, the subsequent £1.7m paid to acquire the freehold property at Northampton ŠKODA and £1.7m of incremental dividend payments compared to the prior year following the change to the Group's dividend policy.
The Group continues to manage working capital robustly and work with its Brand partners to control capital expenditure.
Summary and Outlook
Despite challenging market conditions, the Group has delivered a strong H1 unit sales performance, ahead of both the new and used car markets and underlying profit before tax in line with the Board's expectations.
Given continued weak consumer confidence as a result of ongoing political uncertainty over Brexit, ongoing cost headwinds for the retail sector and further potential new vehicle supply constraints in the lead up to the implementation of further emissions-related regulations on 1 September 2019, the Board believes it is right to remain cautious regarding the outlook for the remainder of the year. Nevertheless, the Board's current outlook for the full year remains unchanged.
Interim Results
The Group will announce its interim results for the six months ended 30 June 2019 on 13 August 2019.