The full-year results for Vertu Motors (VTU) detailed a period of strong expansion, with the car dealer confident that operational improvements at newly acquired dealerships, and this month's disposal of its loss-making Inveco commercial vehicle business, will enhance earnings.
Vertu booked a £3.3m impairment charge for the Inveco disposal and other exceptional items, but strip this out and operating profits increased by 11.9 per cent to £9.4m, or by 31 per cent to £11m, excluding start-up costs linked to new dealerships. During the year, 20 new outlets were opened or acquired to take the total number to 96. The expansion is set to continue as Vertu announced the purchase of Yorkshire Land Rover dealership Albert Farnell Ltd for £31m alongside these results, funded through a £50m placing at 38p a share. The balance of the proceeds are earmarked for additional expansion plans, along with £6m that Vertu intends to generate from the sale of brownfield sites.
Prospects within the industry have improved with new registrations in the UK up by 13.8 per cent in March/April. Vertu's like-for-like new vehicle volumes were up by 15 per cent during the all-important two-month period, although comparative used car volumes remained static, albeit on improved margins.
Panmure Gordon anticipates 2014 EPS of 3.3p (from 3.2p in 2013).
| VERTU MOTORS (VTU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 41p | MARKET VALUE: | £82m | |
| TOUCH: | 40-42p | 12-MONTH HIGH: | 44p | LOW: 27p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 53p* | NET DEBT: | 6% | |
| Year to 29 Feb | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 0.76 | 0.07 | 0.83 | nil |
| 2010 | 0.82 | 4.63 | 2.23 | nil |
| 2011 | 1.00 | 5.25 | 2.02 | 0.5 |
| 2012 | 1.09 | 5.54 | 2.53 | 0.6 |
| 2013 | 1.26 | 4.53 | 1.77 | 0.7 |
| % change | +16 | -18 | -30 | +17 |
Ex-div: 26 Jun Payment: 29 Jul *Includes intangible assets of £22.6m, or 11p a share | ||||
