Vertu chief executive Robert Forrester has hailed an “outstanding” year for the motor retailer against the backdrop of the pandemic, after it posted rising operating profits despite seeing a 21% fall in sales.
The Team Valley firm, which now has a network of 149 sales and aftersales outlets across the 海角视频, published full year results for the year ended February 28 which showed adjusted operating profit of £33.8m, up from £32.2m. Adjusted pre-tax profit came in at £24.6m, a rise on last year’s £23m and ahead of analysts’ forecasts.
Group revenues came in at £2.5bn, a like-for-like decline of 21.6% on last year’s £3.1bn as a result of the Government imposed lockdowns.
During the year Mr Forrester said the group evolved considerably, growing its online retailing to add to its omni-channel selling strategy, while also adding to its network of outlets.
Since March 1 last year, the firm has added eight sales outlets to the group, including three new franchise partners to the portfolio - BMW, MINI and BMW Motorrad - and also increased the efficiency of its transaction processing, including use of robotic process automation
Despite lockdown restrictions which kept showrooms closed, Vertu also sold 38,446 new and used vehicles between January 1 and March 31 and, so far, the company said it has seen a strong start to new financial year, with trading profits at a record level in the two months to April.
As the firm has used Government support in the year, no final dividend is recommended - but the board says it is confident dividends can recommence next January, depending on the group’s financial performance.
For the full financial year, the firm received furlough grant receipts of £27.8m and business rates relief savings of £8.7m. The Government support offset substantial losses, particularly in the first lockdown. In April and May 2020, for example, the group reported a pre-tax loss of £20.1m after Government assistance.
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The group said it does not intend to repay this Government support which arose due to the forced closure of its operations.
Mr Forrester said: “These results, which are ahead of expectations, are outstanding in the Covid interrupted circumstances. I am proud of the entire Vertu team for their adaptability and effort to deliver these remarkable results.
“The group has significantly evolved during the year, with accelerated delivery of its strategy in achieving enhanced online sales capability via its inhouse developed Click2Drive technology platform, reduced cost base due to productivity gains and significantly grown the number of sales outlets.
“We have started the new financial year very strongly, have generated record levels of cash and have a very strong balance sheet. We have now re-instated guidance. Brexit uncertainty is now behind us, and we are exceedingly well placed to benefit from the changes and opportunities which are ahead of us.”
Mr Forrester said the company’s technological advancements - all developed in the North East – have shown that Vertu can meet all manner of customer needs.
He said: “We now have developed technology and working practices where we can be very flexible with customers in how they want to buy a car - a very, very small minority will want to buy a car with no physical interaction at all and just do an e-com transaction, but that’s very small numbers.
“The large majority want to work with us, do a lot of the work at home, look at a video at home, do plenty of phone calls, have a video call and maybe agree to buy the car there and then and have it delivered, but a lot of them still want to come into a dealership. So the technology we’ve created, which we’ve classed as Click2Drive platform, means we can be very flexible. That’s been the biggest change.
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“We sold 38,000 cars when all our showrooms were closed and we weren’t able to do test drives - if you’d told me that this time last year I would’ve been skeptical.”
Ahead of marking its 15th anniversary later this year, Mr Forrester also highlighted good growth in its North East divisions.
He said: “One of the things we’ve done in the last 12 months is grow the North East business. We now employ over 1,300 people in the North East of England, there’s at least another 300 people there compared to this time last year. Out of 5,500-6,000 people it’s quite a staggering business now in the North East. We are the biggest motoring retailer in the North East.”
Shares had risen by 7.42% by lunchtime to 48.34p following the stock market announcement.