Vertu's 'transformational year' created 200 jobs, says chief executive

Following the release of Vertu's latest financial results, Robert Forrester said the company had given a major boost to North East employment

Robert Forrester, Chief Exec of VERTU Motors
Robert Forrester, Chief Exec of VERTU Motors

Motor dealer Vertu, which this morning reported more than doubling its pre-tax profits to £17.5m in a "transformational" year, has revealed it created around 200 extra jobs during the period.

Speaking to the Journal after the release of financial figures for the year ended February 28, chief executive Robert Forrester also confirmed a further 60 employees would be taken on as a result the company’s £8.2m buy-out of Hillendale Group, which operates a Land Rover dealership and a Jaguar dealership in Lancashire.

The acquisition, announced yesterday, represents the latest phase of the Gateshead-based firm’s “buy and build” strategy”, which it has boosted its sales and aftersales outlets around the UK to a total of 108 and its employee headcount to 3,900.

In the year covered by the latest results, revenues rocketed to £1.68bn, a lift of 33.8% on the previous period.

Buoyed by a strong market in new and used car sales, pre-tax profits rose by 116% on last year’s £8.1m, while earnings per share also increased significantly to 4.15p, up 144% from 1.70p. EBITDA was up 131%, from £9.6m to £22.2m.

The dividend was also increased, from 0.7p to 0.8p, up 14.3% for the full year.

Forrester said the Farnell Land Rover business was integrating well following its acquisition in June 2013, going on to win Land Rover Dealer of the Year 2013.

Acquisitions made in previous periods are also continuing to show improvements in performance and margins.

The disposal of the firm’s non-core heavy truck operation like generated £1.9m of cash.

The company said trading performance in March was significantly ahead of earlier years’ levels and the new car retail market year levels is showing continued growth, with group like-for-like sales volumes in March up 20.5% and UK private registrations up 20.8%.

Further acquisitions are in the pipeline for the company, although Forrester was unwilling to share further details at this point.

He confirmed, however, that while premium brands were of interest to the firm, Vertu was pleased with all aspects of the business and did not intend to specialise in this one area.

Although doubling profit may not always be a realistic goal, the business was in a good position to grow further, he added.

Forrester said: “This has been a transformational year for the group during which we have expanded significantly and sustainably, gained our first major premium franchise and developed scaled operations with both Land Rover and Volkswagen, and delivered record profits at every level.

“This growth has been driven by both like-for-like growth from our core business and acquisition.

“The board looks to the future with confidence as reflected in our increased dividend.

“The new and used car markets remain strong with our core business growing. Recently acquired under-performing businesses continue to be turned around.

“We have a strong pipeline of acquisition opportunities and the financial firepower to execute them and we have further strengthened management in the year to allow the expansion to continue.”

He added that while there were always risks, major slumps in the market were unlikely and Vertu was well prepared for the future.

Paul Williams, non-executive chairman, said: “These dealerships represent a broadening of the franchise composition of the group rather than a change of direction.

“We will continue to acquire dealerships across the volume and premium spectrum as the group continues its acquisition strategy.

“The fragmented nature of the UK automotive retail sector means that significant growth potential remains through continued strategic acquisitions. The addition of further dealerships and marques to the Group’s portfolio will help to deliver the board’s goal of mirroring the market share of manufacturers in the UK in the group’s portfolio of franchised dealerships.”

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer