Vertu Motors to beat market expectations

Shares in Vertu Motors climbed higher on Friday after the group revealed its trading performance in the year ended February 28th will be ahead of current market expectations, boosted by like-for-like growth in its retail vehicle sales channels during the five months to the end of January.

By MoneyWeek

published 1 March 2013

in Features

It also reported that like-for-like private new retail volumes grew 13.6%, while like-for-like used vehicle volumes grew by 0.4% in a flat market.

Chief Executive Officcer Robert Forrester said: "It has been a busy and exciting year for the group with 18 sales outlets added propelling Vertu's dealership network to 95 sales and aftersales outlets across the UK, making it the seventh largest retailer in the sector by revenue.

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"The group continues to assess a significant number of acquisition opportunities as it pursues its objective of developing a scaled business in the automotive retail sector."

It certainly wasn't all good news, however, as the company revealed that fleet and commercial vehicle sales declined by 6.8% on a like-for-like basis in the five months to January 31st 2013, reflecting the relative weakness in the UK van market in the period.

The volume of used vehicles sold by the Group in the five months to 31 January 2013 grew by 8.8% overall and 0.4% on a like-for-like basis.

Looking ahead the company said: "March is the most important month for the profitability of the UK automotive retail sector as a consequence of the registration plate change and its impact on both new vehicle demand and the seasonality of servicing. In this context the board is pleased to report that like-for-like private new car ordertake for March is currently running ahead of last year's levels.

"The outlook for the new car market in the UK remains characterised by the continued growth of the private market. One factor which may change the outlook would be a material reduction in the value of sterling against the euro compared to previous periods. Such a change would reduce the manufacturers' ability to incentivise the UK consumer to purchase new vehicles.

"The board believes that there continues to be significant opportunity to enhance aftersales and used car performance in the coming period."

The share price rose 6.83% to 43p by 13:10.

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