Vertu Motors has suggested that its 2021 pre-tax profits could be up to 60% more than forecast just a month ago after continuing its “exceptional” performance in the used car market.
Ands despite a cautious outlook on the second half of the year the group behind Bristol Street Motors and Macklin Motors said it now anticipates adjusted profit before tax for the current financial year – ending February 28, 2022 – will be in the range of £40m to £45m (previously £28m to £32m).
Vertu said that it had managed to maintain its used car stock levels, while current market conditions had allowed it to deliver strong gross margin retention.
It also said that new vehicle supply constraints, due to semi-conductor shortages, have had “no material impact” on its trading performance to the end of June.
Service revenues and profits have also strengthened in recent weeks as the impact of the timing of annual service and MOT work mirrors the prior year's lockdown and release, it said.
Vertu did acknowledge that challenges remained, however.
It said: “New vehicle supply levels will be constrained in the coming months potentially impacting profitability. As a consequence of reduced new vehicle supply, used vehicle supply may also be restricted.
“Uncertainty also remains around the possible impact of COVID-19 from potential future restrictions and colleague absence.
“The current UK wide labour shortages, high vacancy levels and upward pressure on employment costs remain a risk for the business.”
But Vertu’s trading update added: “The board remains very confident in the prospects for the Group, which is strategically well placed to capitalise on the changes and opportunities in the UK motor retail sector.”
Yesterday AM reported that Vertu had acquired Leicester’s Renault and Dacia franchised car dealerships from Renault Retail Group.
So far in 2021, Vertu added Huddersfield’s Hepworth Honda in March to become the Japanese brand’s largest European franchisee.
It has also added Citroen into its Macclesfield Ford dealership and Kia into its existing Volkswagen showroom in Nottingham as part of a multi-franchising drive and completed the £1.5m development of a new Macklin Motors Motornation used car and van showroom in Lookers’ former Glasgow Volkswagen Van Centre.
Forrester, meanwhile, is soon to be featured on ITV’s fly-on-the wall TV series Undercover Big Boss.
Earlier this week AM revealed images and video from a trailer for the new series showing the disguise donned by the high-profile industry figure in order to move freely among unsuspecting Bristol Street Motors staff.