The chief executive of motor retailer Vertu has hailed unprecedented trading conditions as the firm posted record sales and profits, but warned that tougher times are on the horizon.
Continuing demand for both new and used cars has delivered positive tailwinds for the Gateshead-based group, saw adjusted pre-tax profit surge to 拢80.7m in the year to February 28, 2022 - a 228% increase from the 拢24.6m in 2021.
The firm 鈥 which trades under the Bristol Street Motors, Vertu Motors and Macklin Motors banners 鈥 now runs 160 franchised dealerships and aftersales outlets across the country and saw revenues climb to 拢3.6bn from 拢2.5bn.
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Chief executive Robert Forrester toasted the strong results, but warned of potentially tougher times to come as inflation and rising energy costs bite into the 海角视频 economy.
He said: 鈥淭he group performed at record profitability levels in the year. Undoubtedly aided by well-publicised sector tailwinds, the group executed well, gained share, strengthened its foundations, positioned itself for the transition to EV and displayed fundamental growth, all aided by its investment in the Click2Drive technology platform.
鈥淲e鈥檝e flagged that there鈥檚 clearly a risk. If people鈥檚 real wages are under pressure due to inflation, spend on everything will go down and cars could very well be part of that and that鈥檚 something we鈥檝e got to be cognisant of. We鈥檝e been through that dynamic before. We鈥檝e obviously got to watch our own cost base in terms of energy and general inflation, and that鈥檚 going to be one of our key battles.
鈥淚 am incessantly boring people to death with the mantra of 鈥榗ost, conversion and customer experience鈥, because our business will have to work hard to continue to be successful. It鈥檚 a competitive marketplace and I think the market conditions won鈥檛 be as rosy as they were over the last 12 months, which were unprecedented. For used vehicles to keep going up in price is unheard of. The last three months prices have come back to more normal times, so we鈥檝e got to go back to basics.鈥
Vertu has 6,000 employees in total with around 500 staff across its three head office buildings on Team Valley, Gateshead, where Mr Forrester says the combination of technology and centralised processes is giving massive value to the business.
The group has 500 more people now than it had 12 months ago, through acquisitions and job creation, but it also has 500 vacancies and Mr Forrester said recruitment continues to be a challenge.
He said: 鈥淲e鈥檝e got links to universities and do a lot of work with Northumbria University but there鈥檚 a real shortfall of trained people, particularly in the North East in areas like data analytics, search engine optimisation. We鈥檙e taking on apprentices and training our own and trying to recruit. We鈥檙e taking on 200 apprentices this year.
鈥淲e have signing on bonuses for technicians, we鈥檝e enhanced maternity pay significantly, now we have enhanced holidays linked to long service and we鈥檝e done a thorough pay review to make sure we鈥檙e competitive.
鈥淏ut there鈥檚 a trained labour shortage in the 海角视频 which is going to take quite a while to sort itself out. I would certainly like to run with less vacancies than I鈥檝e got. For example, I鈥檓 going to create four more jobs in my recruiting department to try to sort out the recruiting problem, which is irony isn鈥檛 it?
鈥淏ut I think Gateshead is a real gem and when manufacturers come up from the south to look at what we do in Gateshead they are quite amazed at what gets done here.鈥
Looking ahead, he said Vertu is continuing to grow, and that it aims to further develop its portfolio of manufacturers.
Sales of electric vehicles at Vertu, which marked 15 years in business last year, are also increasing and last year they exceeded national average, growing by 166% compared to around 125%, and the firm has also made investments into increasing its own EV infrastructure. Last year it spent 拢500,000 on aftersales capabilities and charging and a further 拢1m is planned in the next 12 months, and Vertu now has 21 dealerships - more than any of its rivals - approved under the Government鈥檚 Electric Vehicle Approved scheme.
He added: 鈥淲e鈥檝e done a lot of work to make sure our business is ready for electrification, but there is a continued need to invest in charging infrastructure. One of the big impediments to that is it鈥檚 okay me putting chargers in, but if the local substation doesn鈥檛 have the electricity to give me, it鈥檚 a bit of a waste of time and I鈥檓 afraid the electric infrastructure of the powergrid, definitely when you get down to local levels, is very challenging. And the Government hasn鈥檛 really got much of an answer.鈥
