7:50 am, March 2, 2022
Vertu Motors today upgraded its pre-tax profit forecast for its financial year from £70m to at least £75m.
In a trading update issued via the London Stock Exchange today (Mar 2), the automotive retailer made the announcement relating to the five-month period to January 31.
Its financial year ended on February 28, and it will be announcing its results on May 11, but in the meantime, CEO Robert Forrester said: ‘I am pleased to report that the board now expects the trading result for the year ended 28 February 2022, at an adjusted profit before tax level, to be not less than £75m.
‘This further upgrade would not have been delivered without a significant team effort and I would like to thank every single one of my colleagues for their hard work and dedication.
‘The trading results have been aided by sector tailwinds and limited vehicle supply leading to augmented margins.
‘In addition, recent acquisitions have contributed at a higher level than initially envisaged due in part to a swift and successful integration process.’
It made £24.6m pre-tax profit in the year to February 28, 2021.
Other highlights were 29 sales outlets added to its portfolio since December 1, 2020, and what it called a ‘significant expansion’ with Toyota.
Meanwhile, a new £3m share buyback programme was also announced. This comes on the heels of a buyback programme for the same amount that was announced in November 2021.
During the five-month period ending January 31, the group sold 32,658 retail used vehicles to consumers – a like-for-like drop of 11.9 per cent versus the pre-pandemic period within the financial year ended February 29, 2020.
It added that like-for-like volumes of new retail vehicles fell by 8.2 per cent versus the same pre-pandemic period. It attributed the decline to reduced supply, especially in the nearly new segment.
Forrester also tweeted his gratitude to staff:
as well as his delight at the success of the previous share buyback programme:
Looking ahead, Vertu said in the update: ‘The strong balance sheet, experienced leadership team and strong systems capability of the group ensures it is well placed to capitalise on the significant opportunities for growth that exist within the UK automotive retail sector.
‘The board considers that scale is a vital success factor in the sector given the need for strong brands and investment in digital developments and continues to have ambitious growth aspirations for the group in the next few years.’
Investment baking operation Zeus Capital reacted to the update by saying: ‘We continue to believe Vertu remains well positioned to deliver significant shareholder value.’
Meanwhile, Sanjay Vidyarthi, senior analyst at independent investment bank Liberum, said Vertu remained its top pick among the franchised dealers.
