Pre-tax profits at Vertu Motors have risen from £70,000 in 2009 to £4.6 million according to the group’s preliminary results for the year ended February 28, 2010.
Revenues were up 7.6% to £818.9m.
Vertu’s results were bolstered by enhanced margins in used vehicles across the group and a richer mix of new retail, used and aftersales turnover in acquisitions.
Robert Forrester, chief executive of Vertu Motors, said: “2009/10 proved to be a much stronger trading period than anticipated due to the twin supports of the Government’s scrappage programme and the strengthening of used car values.
“The £30m placing undertaken in June 2009 provided the group with the firepower to grow the number of sales outlets significantly in the last 12 months. The group’s strong cash position and continued cash generation means we can continue our growth in 2010 and beyond and gain the scale benefits of this growth.”
Forrester said current trading is robust and although the economic and potential political uncertainty poses challenges, he believes Vertu will continue to build a “sustainable and scalable business that delivers shareholder value”.
Vertu increased its network from 44 to 66 from March 2009 to February 2010 and the two Scottish dealerships the group took on in April will provide a platform to build more scale in Scotland.
The group’s total new retail volumes increased by 10.8%, or 1.1% on a like-for-like basis and property split is now 53% freehold compared to 45% in 2009.
New retail car gross margins rose to 8.5% from 8.3%, which Vertu said reflects “consistent success in achieving manufacturer targets”.
Used car gross margins increased significantly from 10.4% to 12.5% reflecting rising used car values.
Vertu’s aftersales gross margins increased from 40.8% to 40.9% and aftersales now represents 43.1% of the group’s gross profit.