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Half year results show leap in sales and profits for car dealer Vertu Motors

Vertu Motors this morning announced its half-year results and showed a 33% rise in sales to £837.2m.

Pre-tax profit rose 68.6% year-on-year to £8.6m, and adjusted pre-tax profits was up 79.6% to £8.8m.

Since March the motor retailer has added seven sales outlets.

The car dealer group now expects its full year financial results to be ahead of expectations.

Robert Forrester, Vertu Motors' chief executive, said: "The board is delighted with the strong results announced today having pursued its successful buy and build strategy for over seven years. 

"With profit before tax up 69% and operating cash generation up 285%, we believe the results reflect a strong market, combined with our growing maturity as a business and are a testament to the continued hard work of all our colleagues.

"The market experienced favourable conditions for motor retail operations in the period with strong new car retail market growth combined with used car price stability and indeed rises.  Enhanced industry profitability is the almost inevitable result."

Forrester added that stronger volumes in car sales should lead to higher aftersales revenues in the coming periods.

He added that Vertu Motors, whose trading brands include Bristrol Street Motors, Macklin Motors, Farnell Land Rover, Vertu Honda, Vertu Cars, Bristol Street Versa and Motor Nation, has made the most of the market opportunity with good performances in the core business and the turnaround of its new dealerships progressing well. 

"The acquisition of Farnell Land Rover in the period will benefit results going forward and market conditions remain favourable with September trading being strong.  As a consequence, the board anticipates the full year results to be significantly ahead of market expectations," Forrester added.

In its statement to investors Vertu Motors said it has a balance sheet underpinned by freehold and long leasehold property portfolio of £104.5m (31 August 2012: £83.8m) and ungeared following the June 2013 placing of shares to raise £50m (gross).

It said it had recorded a 19.6% like-for-like new retail volume increase with consistent margins, while fleet car volumes rose 28.0% with market share gains.

Strong volume and margins in used cars led to 12.2% increase in like-for-like gross profit generation, up £2.8m, it said.

Service revenues increased 6.9% on a like-for-like basis, reflecting the ongoing success of its customer retention strategy, said Vertu, and aftersales margins strengthened on the back of strong like-for-like service margins, up from 75.5% to 76.2%.

Vertu Motors now operates 99 sales outlets from 80 locations.

Click here to hear an audio presentation from Vertu Motors CEO Robert Forrester on the interim results.

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