North East motor retailer Vertu has upped its profit forecast on the back of a surge in the used car market.
The Gateshead firm, which has a network of 154 sales outlets across the 海角视频, issued a trading updating saying the "exceptional" used car market has had a material positive impact on profitability and cash flow.
The group, which operates predominantly under the Bristol Street Motors, Vertu and Macklin Motors brand names, said that used vehicle supply remains tight, particularly in the premium segment, but that it has maintained sales volumes at higher levels than anticipated.
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Vertu said new vehicle supply constraints, caused by the global semi-conductor shortages , have had no material impact on its trading performance to the end of June and new vehicle volumes and margins have remained strong.
Revenues and profits within its service division have also strengthened in recent weeks, with annual service and MOT work falling at the same time as last year’s lockdown and release.
As a result of the strong trading, the board said it now anticipates that the group’s adjusted profit before tax for the six-month period ending August 31 will be between £40m and £45m – up on previous estimates of £28m to £32m.
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But the firm added: “Uncertainty remains around the remainder of the financial year. New vehicle supply levels will be constrained in the coming months potentially impacting profitability. As a consequence of reduced new vehicle supply, used vehicle supply may also be restricted.
“Uncertainty also remains around the possible impact of Covid-19 from potential future restrictions and colleague absence. The current 海角视频 wide labour shortages, high vacancy levels and upward pressure on employment costs remain a risk for the business.
“The board remains very confident in the prospects for the group, which is strategically well placed to capitalise on the changes and opportunities in the 海角视频 motor retail sector.”
Vertu Motors shares are currently tracking 8.6% up at 47.02p.