Motor retailer Vertu is toasting record half-year revenues as acquisitions helped to drive up turnover 21% to £2.4bn.
The Gateshead-based business, which has a network of more than 180 sales and aftersales outlets across the 海角视频, delivered adjusted pre-tax profit of £31.5m in the six months to August 31, a rise of 11.7%, while adjusted operating profit rose 32.3% to £41.4m. The firm said the significant increases were driven by the contribution from the substantial Helston acquisition completed at the end of last year, with the new addition contribution £6m of the reported £11.1m increase in profits.
The company said that constraints over the supply of new vehicles is now easing. Used vehicle sales volumes, meanwhile, are improving with prices reflecting more normalised patterns, having soared to record levels amid new vehicle pressures.
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The firm said it had also seen strong performance in the plate change month of September, despite economic headwinds. Vertu also highlighted the impact of recent advertising schemes and other brand awareness exercises, which saw Bristol Street Motors maintain its rating as the highest-ranking franchised dealership brand in England for prompted brand awareness.
Meanwhile a share buyback programme has now seen the company repurchase 7.7m shares, representing 2.2% of its share capital, at a cost of £5m since March 1 2023, and the buyback continues with 14% of issued shares repurchased over the last seven years. An increased interim dividend of 0.85p per share has been declared, up 21.4% from 0.7p in the first half of 2023.
Robert Forrester, chief executive, said: “The group has delivered 11.7% year-on-year profit growth benefitting from increased scale. The consistent strategies around digitalisation, cost efficiency, smart capital allocation and the development of our management and colleagues is providing a firm grounding to deliver value to our shareholders.
"The interim dividend increase of 21.4% shows the group’s financial strength and the progress being made. Trading in the key month of September was strong reflecting the plate change in new cars.”
Meanwhile, Mr Forrester said the Government’s recent decision to extend the deadline for the axing of new car and petrol cars was “pragmatic”.
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He said: “Given the current cost of living pressures on consumers and the potential impact on the wider economy, the Government has taken a pragmatic approach to row back from an all-out ban until 2035. This aligns to the strategy adopted by the EU. Despite this policy announcement, the 海角视频 Government have imposed a mandate for manufacturers to achieve specific zero emissions vehicle sales targets, starting at 22% of total car sales and 10% of van sales in 2024.
"The target rises incrementally each year to 80% for cars and 70% for vans in 2030, and 100% for both by 2035. Manufacturers will pay the Government £15,000 for every car that doesn’t comply. This policy will drive electrification, despite the Prime Minister’s recent announcement, but at least now provides certainty.”
The group said it is looking to develop ancillary businesses to add revenue, such as the recent addition of the Vertu Cosmetic Repair business, and it is now exploring the development of a separate retail focused smart repair business, to provide cosmetic repairs to the group’s two million customers.
Mr Forrester also said the group had been was successful in reducing vacancy levels in the period and that, following a review of certain departments, it now aims to recruit more staff within its technician and sales team, alongside the recruitment of significant numbers of apprentices across the business.
The board said it anticipates that full year profits will be in line with current market expectations.