Dealer group Vertu Motors is expecting a rise in annual profits but remains cautious for the remainder of the financial year.
In a trading update issued to the London Stock Exchange today (Jul 29), the company revised its anticipated adjusted profit before tax (PBT) for the six-month period ending August 31 to ‘no less than £40m’.
Overall, the firm’s PBT for the current financial year, ending February 28, 2022, is expected to be in the range of £40m to £45m.
That figure previously stood at between £28m to £32m, marking a significant boost for Vertu.
Despite the good news, bosses remain uncertain around the remainder of the financial year, though.
The dealer group says new vehicle supply levels will be ‘constrained in the coming months…potentially impacting profitability’.
As a result of reduced new vehicle supply, there are fears used vehicle supply may also be restricted.
The ongoing Covid-19 pandemic is another source of concern amid worries over the potential for future restrictions.
The statement also said the ongoing semiconductor crisis had had ‘no material impact’ on the group’s trading performance.
It said: ‘Whilst used vehicle supply remains tight, particularly in the premium segment, the group has been successful in maintaining inventory and sales volumes at higher levels than previously anticipated.
‘New vehicle supply constraints, due to semiconductor shortages, have had no material impact on the group’s trading performance to the end of June 2021.
‘The board now anticipates that the group’s adjusted profit before tax for the six-month period ending 31 August 2021 will be no less than £40m.
‘Uncertainty remains around the remainder of the financial year.
‘New vehicle supply levels will be constrained in the coming months potentially impacting profitability.
‘As a consequence of reduced new vehicle supply, used vehicle supply may also be restricted.’
The statement went on to say: ‘Uncertainty also remains around the possible impact of Covid-19 from potential future restrictions and colleague absence.
‘The current UK-wide labour shortages, high vacancy levels and upward pressure on employment costs remain a risk for the business.
‘At this stage, despite the exceptional performance during the first half of the year, the board retains a cautious outlook, but nevertheless now anticipates that the group’s adjusted profit before tax for the current financial year ending 28 February 2022 will be in the range of £40m – £45m (previously £28m – £32m).
‘The board remains very confident in the prospects for the group, which is strategically well placed to capitalise on the changes and opportunities in the UK motor retail sector.’
The news comes as Vertu CEO Robert Forrester, pictured, prepares to star in the ITV show Undercover Big Boss.
Earlier this week, ITV released a trailer for the programme and a publicity shot of Forrester ahead of his appearance in the series.
His episode will air on Thursday, August 12.