Continued profit growth for Vertu Motors

Gateshead's Vertu Motors plc says it has continued to experience year-on-year profit growth from both new and used vehicle sales

Fast-growing Vertu Motors is on track to report robust half-year results, as encouraging trends in the automotive industry continue to support its expansion plans.

At the Gateshead group’s AGM in July, it revealed its like-for-like retail volumes had risen 18.6% during the four month period to June 30 as a consequence of strong market conditions, with car registrations to private buyers increasing by 16.6%.

The group, which has recorded sales of over £1bn for two years running, also had like-for-like profit growth in each of its activities, with total revenues growing by 30.8% as like-for-like revenues rose by 13.2%.

In a trading update posted on the London Stock Exchange yesterday, it said positive trends had continued, with year-on-year profit growth from new and used vehicles sales, as well as from vehicle servicing.

The board was also confident that further progress would be made during the remainder of the financial year.

Chief executive Robert Forrester said: “Market conditions in the automotive retail sector remain favourable with growth in new car sales and stability in used vehicle pricing, and the robust and growing platform we have built is ensuring that these trends are converted into improved profits.

“Service operations in the group continue to exhibit growth as a consequence of higher levels of customer retention.

“We are pleased with the pace of integration and the performance at the newly acquired Farnell Land Rover business.

“This business will make a significant contribution to the group this year.”

Vertu Motors, which was formed in late 2006 to acquire and consolidate UK motor retail businesses, bought Albert Farnell Land Rover in May, taking over four of its dealerships in West Yorkshire.

It was the latest in a series of acquisitions for Vertu, which employs over 3,500 people, over 150 of which are based at its Team Valley headquarters.

The group, which has a network of 97 sales and aftersales outlets across the UK, paved the way for its own expansion by raising £50m through a placing of more than 130m shares.

It also bought two Volkswagen dealerships in Lincolnshire from Lookers plc, opened a new standalone SEAT dealership in Birmingham in July, and announced it was disposing of its loss-making Iveco division.

“We are just bedding the Land Rover dealerships in at the moment, but it’s going well,” said group finance director Michael Sherwin.

“The management teams on those dealerships have relished the fact that they are now part of a motor retail organisation.

“And the performance of those businesses is everything we thought it should be.”

Vertu will announce its half-year results on October 16.

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