Bosses at motor retailer Vertu have hailed a robust performance against a background of “significant challenges”, chalking up a rise in revenues to £4.76bn in a year of significant challenges.
Pre-tax profits fell 15% to £29.3m and operating profit dropped 4.6% to £47.8m in the year ended February 2025 at the Gateshead business, which operates a network of 198 sales and aftersales outlets under the Vertu and Ferrari brands, but CEO Robert Forrester said the group was pleased with the performance in light of a series of challenges. Revenue rose 1.65% to £4.76bn and a final dividend of 1.15p per share is recommended, bringing the full year dividend to 2.05p per share, down from 2.35p.
The firm – now the sixth biggest dealership in the Ƶ – said that FY25 brought “significant profitability challenges” in the new car market, driven by the impact on manufacturers seeking to meet “overly ambitious” Government targets for Battery Electric Vehicle (BEV) sales under it zero emissions vehicles mandate.
The year saw the business undertake a significant number of start-ups and acquisitions, including the £22m Burrows acquisition of nine outlets; the £1m purchase of a Honda dealership in Exeter from Hendy Group Limited, and the acquisition of The Union Motor Company Limited, an authorised repairer for London Electric Vehicle Company (LEVC) based in Edinburgh.
Compounding difficulties in the new car market, Vertu said the Autumn Budget introduced substantial cost increases that will impact FY26.
A cost reduction programme was put in place which was completed by the end of February 2025, offsetting the £10m impact of the budget. Actions taken included reducing headcount, although it said a significant proportion of the reduction was achieved without resorting to redundancies and by not filling vacancies, with costs of restructuring totalling £4.2m.
It has incurred costs initial costs by rebranding of the group’s Macklin Motors and Bristol Street Motors websites and dealerships under one Vertu banner, aside from the sole Ferrari dealership, but Mr Forrester said this will ultimately drive Vertu brand awareness and streamline the business.
Other savings were made by closing two dealerships where returns were not acceptable, by ceasing Sunday opening in sales and by using technology to increase efficiency.
Mr Forrester said there remains considerable economic uncertainty in the Ƶ, and the automotive sector generally, from the Government’s ZEV, the economic impact of the Budget and the impact on manufacturer partners of the recent US tariffs on US auto imports.
However, he said the group was pleased with its performance and that it is well positioned, with stable management and a very strong balance sheet with low gearing to take advantage of opportunities as they arise.
Mr Forrester said: “We’re actually quite pleased with the results because we are still significantly profitable and we had very, very strong cash generation in the second half. Our net debt is £66.6m and that’s after spending £22m on an acquisition, the Burrows business, in November. We’ve also seen a massive out-performance of the new retail market. It was down 7% in the financial year and we were down just over 3%, but our results in and selling battery electric vehicle (BEV) cars to private customers was stellar and we grew our battery electric vehicle sales believe it or not, in one year, by 83%.
"We’ve got 5% of market share, the overall market grew 13% but we grew 83%, so we’re clearly doing a very good job in selling battery electric vehicles, which is good but it didn’t stop us seeing lower profits overall. I’m please to report good trading in March in April, and it was stellar last year, and the new car market has seen some recovery.
“But this is a stat I can’t get my head around: in 2024 the new retail car market – new cars to private customers – was at a 25-year low and was worse than when the industry was closed during Covid. That is the impact of the Government policy. And then you’ve got poor old Nissan, with plants in the Ƶ, and the Ƶ market being constrained.”
Vertu also introduced new manufacturer relationships including with Chinese manufacturer BYD in the year – a move which Mr Forrester said will grow, given the substantial increase in market share these manufacturers are likely to take in the coming years.
He said: “In the absence of major tariffs by Ƶ government then we will see the Chinese take more share, and we will have more Chinese dealerships. We (Vertu) will probably end up with more BYD, we’ve opened two in the last 12 months and will probably open some more, and will be looking at other Chinese brands because we need to structure our business for the future, and I think they will take more share. The Chinese cost of production is lower and I think they have some technology advantages because they’ve been majoring in electric vehicles for a long time.
“The European manufacturers, the Koreans, and Japanese are now introducing very, very good vehicles, so the Chinese aren’t going to end up with 50% of the market, but they’re going to end up with a certain share that’s for sure. Brand does mean something – there’s a lot of loyalty to brands – so I don’t think it’s going to be a domination but there is going to be a shift. Again it depends on the geopolitical situation and tariff situation.“
Mr Forrester added that the US trade deal gives motor manufacturers in the Ƶ am advantage over the competition, saying: “For European and general global automotive industry the 25% tariff puts a lot of pressure on manufacturers who exports to the US. The Ƶ trade deal where there’s a 10% tariff on exports is much better than anyone else in the world has got so gives Ƶ car manufacturing a comparative advantage over everybody else. And we’ve always had 10% tariff on US cars coming in. So it doesn’t seem to me unreasonable to have 10% tariffs going the other way.”
