Vertu Motors boss casts doubt on double-dip

THE BOSS of rapidly expanding Vertu Motors says his experience of the current market throws doubt on the official statistics that the UK has entered a double-dip recession.

Robert Forrester, chief executive of Vertu Motors
Robert Forrester, chief executive of Vertu Motors

THE BOSS of rapidly expanding Vertu Motors says his experience of the current market throws doubt on the official statistics that the UK has entered a double-dip recession.

Robert Forrester, chief executive of the Newcastle-based 78-outlet group which has seen sales top £1bn for the first time, said that consumer confidence has returned to the car-buying market this year after a tough 2011.

“We wouldn’t be selling cars in a double-dip recession,” said Forrester. “The data in my mind doesn’t fit with our experience – the CBI, the PMI surveys and my general feeling is that we’re really not in a double-dip.”

Vertu, which mainly trades as Bristol Street Motors, said revenues rose by 8.9% to £1.09bn in the year to the end of February, reflecting its acquisitive policy.

Pre-tax profits rose 3.8% to £5.5m - the adjusted figure was down by 13.1% at £7.3m, and operating profits rose by 6.3%.

Forrester said: “It’s been quite a challenging year for retail from April to December, but we saw consumer confidence coming back in January.

“We went through the £1bn [sales] mark for the first time so that is a landmark. We now have more than 3% of the new car market.

“It was a stronger second half. We bought a lot of businesses and we are turning them around quite quickly. That gives us a lot of confidence. We had a robust March and April.”

The figures showed that used car like-for-like volumes rose by 9.8% in March and April, while Vertu out-performed the new car market average. Its new car sales saw volumes decline by 3.5% against a national retail market drop of 11.9%.

Forrester said that savvy buyers recognised that buying a newer, more fuel efficient car could help offset the continued climb in fuel prices.

“The new ones we are selling are phenomenally efficient. The switched on consumers know that modern cars are very efficient.”

The most important month for new car sales is March, when the registration plate changes. New private sales in March and April jumped by 9.1%, or 4.1% on a like for like basis.

Vertu said there was a “strong pipeline of potential acquisition opportunities”.

“We’d expect some more acquisitions this year,” said Forrester. I haven’t set any targets. We will grow in line with our management and financial capability.

“We are growing the size of our employment in Gateshead. We have 50 in our contact centre. The business is based in the North East and North East employment will grow in line with the business.”

The a full-year dividend of 0.6p per share is proposed, up 20% on 2011.

 
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