Despite tackling three national lockdowns Vertu Motors says it will end its financial year with a profit of around £23m – and is targeting ‘ambitious growth’.
Vertu gave the Stock Market an update this morning ahead of the group’s annual results, due on May 12, which will cover its full financial year.
The update reveals that it has a ‘strong pipeline’ of acquisitions and more ‘multi-franchising’ opportunities as it looks to take advantage of the ‘significant growth opportunities’ in the sector.
The update – which covered five months up to the end of January – showed group revenues were up 4.1 per cent.
Profit for the year will come in around £23m, expects Vertu, down slightly on the previous year’s £23.5m.
Government support, says Vertu, including the furlough scheme and business rates relief, totalled £8.2m in the period.
Robert Forrester, chief executive of Vertu Motors – who will be appearing on a special Car Dealer Live this Wednesday alongside fellow listed dealer group boss Daksh Gupta – said digital sales had helped his group during difficult periods.
He said: ‘I am pleased to report that the board expects the trading result for the year ended February 28, at an adjusted profit before tax level, will be in line with current analysts’ forecasts of around £23m.
‘The period includes two national lockdowns, in November and from January 4, which closed our sales showrooms.
‘Despite the impact of these national lockdowns and regional lockdowns throughout December, the group’s strong marketing activity, use of omni-channel retailing functionality and cost control have meant that a creditable trading performance was attained in the period.
‘This result has been delivered by a huge Vertu team effort and I would like to thank every single one of my colleagues for their hard work and dedication in what has been an extraordinary period.’
Forrester added that ‘notwithstanding the government’s recently announced roadmap’ that the outlook remained ‘uncertain’, but was pleased Brexit uncertainty was behind them and added: ‘The pound’s recent strengthening should help to make cars more affordable to UK buyers.’
Vertu – which now has 147 sales and aftersales sites in the UK – has added 29 sites to its portfolio since the start of 2020.
Today, the group has added Peugeot to the group’s Edinburgh dealership, that already represents Kia, Suzuki and Mitsubishi.
Vertu said: ‘This business is currently located in leasehold premises but will relocate into a new purpose-built freehold dealership on the expiration of the current lease in 12 months’ time.’
Vertu also opened a new used vehicle operation in Glasgow today, dubbed ‘Macklin Motornation’ which it plans to ‘franchise’ in the future.
The group says like for like new retail sales were down 13.3 per cent but stronger margins were made. Used car sales were also down in the period 15.7 per cent but profit per unit was up to £1,497 from £1,214.
It said: ‘In the period, UK used vehicle supply remained constrained, as fewer new vehicle transactions have restricted fresh supplies of part exchanges into the wholesale markets.
‘Wholesale pricing in the UK saw some declines from November onwards, particularly in some volume franchises, but not enough to eradicate the strong gains seen over the summer months.
‘Like-for-like gross profit per unit, however, grew 23.3 per cent. Much of this growth arising in the group’s premium dealerships, where significantly reduced new vehicle supply and removal of the oversupply of nearly new vehicles have significantly benefited used vehicle margin retention.’
Commercial vehicle sales rose 34 per cent, though, and service revenue from retail customers was up 5.3 per cent
Industry analysts Liberum said they believe Vertu is ‘well-positioned to consolidate the market and drive higher returns’.