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Stoneacre owner Richard Teatum invests over £3m in Vertu Motors

Vertu Motors new logo

Stoneacre Motor Group’s founder and owner Richard Teatum has invested over £3 million in rival car retail group Vertu Motors.

A notice issued via the London Stock Exchange yesterday (September 2) flagged-up Teatum’s purchase of a 3.69% stake in the Gateshead-based AM100 PLC.

ASE Global chairman, Mike Jones, took to LinkedIn to comment that the investment was a “shrewd investment in an undervalued asset” and questioned whether it could, in fact, be an indication of a future tie-up between Vertu and Stoneacre.

South Yorkshire-based Stoneacre has long held a target of becoming a £1 billion turnover car retail group and expects to reach that target in 2020.

In February this year its annual financial results to the end of April last year revealed that its acquisitions and business growth had seen revenues rise to £982.1 million (2018: £786,302).

Vertu Motors shares have recovered from a 2020 low of 17.3p, at the start of the COVID-19 lockdown of the UK’s car dealerships on March 23, to 27p this week.

In its latest trading update, delivered via the LSE last month, the group reported an adjusted profit before tax of £7.4 million in July after post-lockdown trading which had been “significantly stronger than envisaged”.

Vertu introduced a 0% finance used vehicle sale at the majority of its dealerships in England and also made 345 redundancies last month in order to 'future proof' the business.

The 6% cut to Vertu's headcount is expected to save the business £10m in ongoing annual costs.

Vertu incurred an adjusted loss before tax of £5.2m in the March to June period and so has now made a year to date adjusted profit before tax result of £2.2m.

Back in May Vertu indicated to the market that it would be well positioned to grow through acquisitions following the COVID-19 lockdown period.

Commenting on the subsequent trading results for June and July, Robert Forrester, Vertu chief executive, said: “July trading continued the trends seen in June and was significantly stronger than both what we envisaged and the group's original business plan for the month.

“A robust recovery in customer demand for our vehicles and servicing has continued, aided by our investments in omnichannel retailing.”

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