AM Online

Vertu acquires Lookers Volkswagen dealerships

Three years after adding the Seat brand Vertu Motors has now gained its first Volkswagen franchises.

The plc car dealer group with 97 sites has bought Lincoln Volkswagen, on a leasehold property, and Boston Volkswagen, including a freehold property, from Lookers.

Vertu expects to pay £3m for the businesses, including £300,000 for goodwill, to be settled in cash from Vertu's existing resources.

In 2012 the two dealerships achieved £20.2m turnover and profit before interest and tax of £320,000.

Vertu said the deal further develops the group’s regional concentration in the East Midlands and Lincolnshire - its already operates Honda dealerships adjacent to both VW outlets.

In addition to the acquisition, Vertu is opening of a standalone Seat dealership at Star City, Birmingham on July 15 July. 

This extends the Vertu's Seat representation westwards from the existing Derby SEat dealership, and brings the group’s number of Seat outlets to five.

Robert Forrester, CEO of Vertu Motors said: “We are delighted to introduce the hugely respected Volkswagen franchise which commands a UK market share of 8.75% into our manufacturer portfolio. 

"These two dealerships will trade as Vertu Volkswagen and are situated in locations which are familiar to us from other group operations and build on our strong presence in the East Midlands.

"We are also delighted to be opening a new Seat dealership in Birmingham, the city where Bristol Street Motors was founded 100 years ago this year. 

"These developments deepen our relationship with the Volkswagen Group, which we consider to be a key strategic development in building a balanced portfolio.”

The dealerships will be branded Vertu Volkswagen - aligned with the adjacent Vertu Honda businesses.



If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Login to comment

Comments

  • Chilli pepper - 10/07/2013 16:24

    Why do people talk about profit before interest? If these 2 dealerships only made £300k on this basis, then in real PBT terms they lost money, otherwise why would Lookers sell??!!! Good luck with The Seat dealership at Star City! Locally known as Stab City!!

  • Shareholder - 16/07/2013 13:26

    I am happy to see this strategy of growth by acquisition continue, but I share the comment below about paying nearly 10 times for profit (PBIT) for what I expect may be three struggling dealerships. A recent note from analysts Panmure Gordon suggested Vertu as the best buy in the car dealership space, but its' analysis also highlighted that profit margins for Vertu are well below all the others, including Lookers and Inchcape who I guess are able to make use of their scale. As an investor I just want to see more effort being made on getting margins up as part of a good customer service and growth strategy. Getting revenue to grow is not difficult if one buys dealerships, but doing so profitably is the challenge. Please Mr Forrestor et al, continue to look for growing margins as well as growing sales. That said, I do appreciate the work you are all doing at Vertu and look forward to the share price growing (so long as our equity stakes are not diluted again through another discounted capital raising exercise through equity).