Vertu Motors makes its second acquisition since £50m share placing

Motor retail plc Vertu has made its second acquisition since its £50m share placing in May and bought up its first Volkswagen dealerships for £3m

Vertu Motors Chief executive Robert Forrester
Vertu Motors Chief executive Robert Forrester

Motor retail plc Vertu has made its second acquisition since its £50m share placing in May and bought up its first Volkswagen dealerships for £3m.

The two Lincolnshire acquisitions from Lookers plc come amidst a busy month for the Gateshead-based firm, which now employs more than 150 staff at its Team Valley headquarters.

Vertu will also open a new standalone SEAT dealership in Birmingham this weekend,

The branch, located at Star City, extends the current sales territory of the group from the existing Derby SEAT dealership into the West Midlands.

This development brings the group’s total number of SEAT outlets to five.

Vertu Motors CEO Robert Forrester said: “We are delighted to introduce the hugely respected Volkswagen franchise which commands a UK market share of 8.75% into our manufacturer portfolio. “These two dealerships will trade as Vertu Volkswagen and are situated in locations which are familiar to us from other group operations and build on our strong presence in the East Midlands.

“We are also delighted to be opening a new SEAT dealership in Birmingham, the city where Bristol Street Motors was founded 100 years ago this year.

“These developments deepen our relationship with the Volkswagen Group, which we consider to be a key strategic development in building a balanced portfolio.

“We are busy looking at various businesses across the UK and there will be further acquisitions before the end of the year.”

Vertu, which now has 97 sales and aftersales outlets across the UK, acquired a freehold property in Boston and a leasehold property in Lincoln.

In the year ended 31 December 2012, the management accounts of the acquired businesses showed a turnover of £20.2m and operating profit before interest and taxation of £320,000.

The news comes two months after it announced the £31m acquisition of its first Land Rover dealerships after topping sales of £1bn for a second year.

It raised £50m through a placing of more than 130 million shares to support its bold ambitions to make further acquisitions to add to its outlets.

The firm bought Albert Farnell Ltd, which runs four Land Rover dealerships in West Yorkshire, representing the purchase of a company that achieved revenues of around £113m and operating profits of £3.9m to the year end December 31,2012.

Results for the year to February 28, 2013, were also published, showing a 15.7% increase in sales to £1.26bn, although pre-tax profits dropped to £4.5m from £5.5m.

Operating cash flow was also up to £13m from £7.5m, and the dividend was also increased from 0.6p in the last financial year to 0.7p.

Earlier this month Vertu announced it was disposing of its loss-making Iveco division, allowing the company to focus fully on cars and light commercial vehicles. After selling 5,000 new and used cars in the financial year, the firm said the figures show the new car retail market continues to grow, with like-for-like figures in March and April up 15%.

Established in 2006, Vertu has grown the business rapidly, and over the past 24 months the company has opened its first Volvo franchise and become the largest UK franchise partner of Honda.

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