The good news comes in the dealer group’s trading update which was published ahead of its preliminary results for the year ended February 29, 2012.
‘While there is clearly significant work to do during the month to deliver a strong March performance, this ordertake position gives the board confidence,’ said the trading update.
‘In addition, progress continues to be made in delivering an enhanced performance from dealerships acquired in the last two years.’
The five months to January 31, 2012, also saw the dealer group grow its market share of the UK new car market. In contrast to a 8.5 per cent fall in new car registrations, the five month period saw Vertu’s new sales volumes fall only 4.2 per cent on a like-for-like basis, and maintain its gross profit per unit on private new car sales.
Used car volumes also grew for Vertu’s dealers – in the five month period, volumes grew by 14.7 per cent overall, and 1.4 per cent like-for-like. Gross profit per unit was above £1k – a key industry benchmark – and generated a return on investment in used cars of 129 per cent.
But it’s not just good news for Vertu’s dealers in the new car arena as fleet and commercial vehicle sales volumes rose 10.1 per cent like-for-like, and the gross profit per unit achieved on these vehicle sales was above the historic norm of £350 per unit.
Aftersales was also an area Vertu grew its gross profits thanks to implementing ‘clearly defined initiatives’ in customer retention and workshop efficiencies. Training is also an area the dealer group is investing in to increase levels of customer service.
Gross margins in service, however, have suffered in the five-month period. They declined in line with the strategy to attract more price sensitive customers with older vehicles into Vertu’s dealerships.
Gross margins in the group’s bodyshops and parts supply operations strengthened, though, resulting in a higher overall aftersales margin of 44.3 per cent compared to 43.0 per cent last year.
Looking ahead, Vertu is confident of delivering growth in the year ending February 28, 2013.
Vertu will announce its preliminary results on May 16, 2012.