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Vertu disposes of heavy truck business

Vertu has sold its heavy truck businesses to Aquila Truck Centres (Italia) in order to be an entirely car and LCV focussed business.

Contracts for the sales of the trade and certain assets of its Iveco sales and aftersales outlets at Bristol, Swindon and Gloucester - with 72 staff - have been exchanged. Two are standalone, the latter is a shared site with a Ford centre.

The businesses were part of Vertu's acquisition of Bristol Street Motors in March 2007.

Vertu chief executive Robert Forrester said: "It means we are coming out of the heavy truck business entirely and will be a car and LCV focussed business. Trucks is a specialist area and there are others who have the required specialist knowledge. The business was also loss-making."

Aquila is an established main dealer for MAN Truck and Bus, Caterpillar, Isuzu and Neoplan and an authorised repairer for Iveco. 

Completion of the sale is expected to take place on May 31. Vertu expects that this disposal will be earnings enhancing in the financial year ending February 28, 2014.

The sale came about following a strategic review of its operations to ensure that they fit with the strategy of developing "future scalable relationships" with manufacturer partners in profitable and appropriate locations.

As a result of the review the group determined its heavy trucks operations to be non-core, with neither marketing nor management synergies with the group’s expanding motor retail activities.

In the year ended February 28, Vertu’s Iveco operations had revenues of £18.0 million and incurred an operating loss of £0.6m. 

The assets to be disposed of comprise vehicle and parts inventories and fixed assets for which the expected net cash consideration will be approximately £1.5m which will be used to reduce net debt. 

In addition, Vertu will receive £192,000 of preference shares in Aquila Truck Centres (Italia) redeemable in 2018 which will be retained and carry a coupon of 4% per annum. 

For the year ended February 28, the group expects to recognise exceptional losses of £0.8m in relation to the Iveco business relating to onerous leases and asset impairments.


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