9:54 am, March 1, 2017
VERTU Motors’ volumes, revenues and profits all grew in the five months to the end of January, according to a trading update it issued today.
A highlight of the figures was that the automotive retailer’s aftersales operation continued to thrive, with servicing revenues, margins and profits all increasing. That arm of the business generated 38.2 per cent of Vertu’s overall gross profit for the period.
Used vehicle volumes grew on a like-for-like basis, meaning there has been five years of continuous growth, and used car margins and volumes increased to deliver significant profit growth. Thirty per cent of gross profit was earned from used vehicles in the period and the group now has more than 100,000 customers paying monthly for its own three-year service plans.
The group’s total new retail vehicle volumes grew by 1.5 per cent during the period while like-for-like volumes fell by 9.3 per cent. This was partially offset by higher like-for-like gross margins, which strengthened from 7.9 per cent to eight per cent. Like-for-like gross profit per unit increased by 6.5 per cent, from £1,243 to £1,324, more than offsetting the impact of higher sales prices on margins.
The group has a strong balance sheet with a significant freehold property portfolio and very low levels of debt, providing considerable firepower for growth. In addition, the company has just entered into a new five-year banking agreement with Barclays and the Royal Bank of Scotland which could potentially free up £70 million for future expansion.
Chief executive Robert Forrester, pictured, said: ‘We are delighted with the group’s performance during the period, particularly in used vehicles and our high-margin aftersales business, and we expect our full-year results to show continued growth in revenues and profits.
‘Vertu has an excellent team, a strong balance sheet and a proven growth strategy, and as such, the board is confident of the group’s future prospects.’
The company, which has 125 sales and aftersales outlets across the UK, will announce its preliminary results for the year ended February 28, 2017 on May 10.
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