10:47 pm, July 22, 2011
VERTU has announced its group trading profitability was ahead of their budget but remains below prior year levels.
For its results for the four month period to June 30, 2011, the dealer group cites ‘the fragility of UK consumer demand in the retail sector’ and the ‘devaluation of the Sterling’ has causes of pressure on new and used car markets.
Vertu also says that the four month period also highlighted the ‘increasing importance of aftersales’ to its business. Its like-for-like profitability in aftersales increased and like-for-like gross margins improved from 40.1 per cent to 43.1 per cent.
However, volumes of new car sales to private customers for the group declined by 6.6 per cent on a like-for-like basis – but the group says that sales decline was higher in those franchises directly impacted by the Japanese earthquake, adding it will take several months for normalisation.
New acquisitions helped Vertu’s new retail sales volumes increase by 14.7 per cent, but new car like-for-like margins fell from 7.9 per cent to 7.4 per cent in the four month period.
The decline in used car like-for-like retail volumes also continued, falling 5.8 per cent.
Paul Williams, Vertu chairman, said: ‘The board remains confident that acquisitions undertaken in recent periods will continue to show an improving profitability trend. Whilst UK consumer demand remains fragile and vehicle sales remain under pressure in the short term, further acquisition opportunities are likely to arise as a result of these market conditions. The board intends to take advantage of these opportunities in order to deliver future shareholder value.’
