Vertu Motors is celebrating the improvements in its dealerships as adjusted profit from continuing operations rose 31% to £11m in the 12 months to the end of February.
Full-year operating profit adjusted for exceptional charges, amortisation and share based charges rose 11.9% from £8.4m to £9.4m.
Revenue was £1.3 billion, up 15.7% from £1.1bn a year ago. Like for like revenues rose 6%. Overall gross margin fell to 11.8% from 11.9% due to larger volumes of vehicle sales.
During the year it delivered almost 95,000 new and used vehicles, a rise of 13.5% or 4.7% like-for-like growth, while aftersales revenues rose 2.1% on a like-for-like basis.
Vertu said its March and April trading performance was significantly ahead of prior year and budget levels. The new car retail market in UK was showing continued growth with group like-for-like volumes in March and April up 15.0%. UK private registrations rose 13.8%.
The company said it a strong pipeline of potential acquisition opportunities being pursued, and announced the acquisition of the Co-operative Motor Group's Farnell Land Rover businesses for £31 million.
That becomes its second premium brand business, alongside Derby Volvo which it opened in the winter.
"The Group has delivered a record underlying operating profit reflecting both better market conditions and the delivery of an enhanced performance from acquired businesses, which have benefited from the Vertu turnaround model," said chief executive Robert Forrester.
"There is more to come as we continue to drive operational improvements in newly acquired dealerships that remain significantly below group average in terms of returns," he said in a statement.
The dealerships acquired in the last year contributed a £1.6m operating loss.
Exit of Iveco, Mitsubishi and Fiat Professional franchises
Vertu said its disposal of the loss-making Iveco division would improve margins and therefore its results.
It also terminated its single Fiat Professional van franchise in Swindon, and closed four bodyshops.
It is due to exit its sole Mitsubishi franchise at Hamilton on May 31, but in July will open its eighth Nissan dealership, in Northampton.
"The board is focused on building a scaled, automotive retail group with strong, deep manufacturer relationships and this transaction is an important milestone in concentrating this focus," Forrester said.
"The board remains confident in the future, reflected in our increased dividend. The board also has a continuing appetite to acquire further dealerships for both existing and new manufacturer partners."
Click here for Vertu's full announcement to the London Stock Exchange.
As editor, Tim is responsible for the media content, planning and production of AM's multiple channels (AM print and digital magazines, website, social media and contributing to our events planning). He interviews and writes about as many franchised dealer groups and UK divisions of motor manufacturers as possible, to explore the issues facing UK motor retail and understand what solutions dealers and suppliers are using to overcome these.
Chilli Pepper - 21/05/2013 14:35
i cant see why VERTU are celebrating, their PBT has actually fallen to £4.5M £500K WORSE than 2011!! 0.34% ROS!! Vertu always talk about exceptional costs? Doesnt every large dealer group have exceptional costs every year???? Mr F seems to be adept at dressing up a fairly mediocre result!!!