8:40 am, October 16, 2024
Vertu Motors’ dealerships will all wear ‘Vertu’ branding by April 2025 company bosses have announced, as the dealer group signed off on a strong set of half-year results.
Posted on the London Stock Exchange this morning (Oct 16), the listed dealer group’s H1 FY25 results showed the company had made strong gains in a ‘fast-shifting market backdrop’.
Adjusted profit before tax was down by £8m on the same period last year, but still came to a very robust £23.5m.
That drop was expected, though, the dealer group said as it battled higher inflation costs and invested in more staff. Vertu added that it expects profitability in the second half of this year to improve over prior year levels, due a stronger used car market and boosted used vehicle trade prices.
Revenue was up by 2.9% to £2.5bn for the period as the business focussed on aftersales, used cars and retail new electric vehicles – all of which returned impressive growth figures. Acquired dealerships contributed revenue growth of £45.1m, while the closure of some showrooms reduced revenues by £24.8m.
An interim dividend of 90p – up 5p on the same period last year – has been declared, and payable in January 2025. Shares in the group were trading at 59.10p this morning.
Sales of new cars fell by 5.5% to 18,441 (which includes agency volumes), like for like, but the group increased its market share – up by 0.2% to 4.8%. Vertu scored big on retail sales of new EVs – up a significant 10.9% against a 7% decline in UK BEV registrations, like-for-like, according to SMMT data.
Motability sales rose a chunky 23%, like-for-like, while overall, Vertu said it is seeing ‘a dampening effect’ on new vehicle margins due to a ‘push’ market and increased mix of Motability sales.
Like-for-like used vehicle sales were up 3.9%, and profit-per-unit was just a few pounds short of the same figure last year – £1,551 (H1 FY24) compared to £1,509 (H1 FY25), and up compared to H2 FY24 (£1,313). Vertu said this moderation was due to keeping nearly new cars and demonstrators looking competitive against ‘very strong’ new car offers, particularly in the premium sector.
Aftersales, meanwhile, delivered core group gross profit growth of £7.1m.
Additionally, during the six-month period, Vertu opened new dealerships – Ducati in Sunderland, Peugeot in Carlisle – and began new relationships with Chinese brands BYD and Leap Motors.
Commenting on the interim results, CEO Robert Forrester said: ‘I am pleased with the group’s first half performance against a fast-shifting market backdrop. Our high margin aftersales business delivered an excellent H1 performance, aided by higher technician numbers and execution of the group’s vehicle health check process.
‘The retail new car market declined as the government’s regulation to transition to battery electric vehicles (‘BEV’) introduced market volatility and negative effects in terms of affordability. We took considerable market share in the new retail market, and in the BEV market in particular, reflecting the group’s adaptability and strong operational execution.
‘The group’s strong balance sheet, excellent portfolio of brands, robust and scalable systems, and a strong and experienced leadership team with motivated colleagues puts us in a great position from which to deliver on our strategic goals. We are actively pursuing value accretive growth opportunities to enhance our portfolio, applying strict investment return metrics as well as returning cash to shareholders.’
The half-year trading report also revealed the listed dealer group’s plans to brand all of its dealerships as ‘Vertu’ by April 2025.
The branding exercise will boost marketing ROI and cut costs, said chairman Andy Goss.
The decision means the Bristol Street Motors and Macklin Motors names will disappear from dealerships for good.
Explaining the move, Goss said: ‘Following a detailed review of our brand strategy, we are confident this transition will be well received by customers and manufacturers and yield immediate marketing efficiencies as well as other operational benefits which will help to mitigate continued cost pressure in other areas.
‘Upfront costs incurred from this initiative will be more than offset by savings in the first 12 months of the rebranding.’
The report also gave insight into Vertu’s current trading and showed like-for-like new retail car sales grew by 5.2% in September, and it ‘more than doubled’ year-on-year sales volumes of EVs.
