Tempting financing deals from car manufacturers desperate to stimulate demand in the UK as the European new car market lies in tatters helped send like-for-like new car retail volumes at Vertu Motors (VTU) up 18.6 per cent in the first four months of the financial year, compared with 16.6 per cent growth in new car registrations in the wider UK market.
Higher-margin used car sales rose 4.7 per cent, against a market that's actually reported to have declined in the first quarter of 2013, and strong pricing discipline helped the gross margin strengthen.
In the car fleet division, like-for-like volumes grew 26.8 per cent, compared with 3.7 per cent growth in the wider market, although sales of commercial vehicles were up 2.3 per cent, against 8.2 per cent growth in the UK.
In aftersales, which has the beefiest margins in the car dealership business and represents roughly 50 per cent of profit for most companies, like-for-like sales, gross profit and net profit at Vertu all grew in the period. Much of this was down to competitive service plans offered to new car owners to keep them loyal and the remarkably high level of training given to staff and close monitoring of their performance to ensure they're working to the highest standards.
Group gross margins were flat, despite improvement in both vehicle and aftersales, because of a change in sales mix: lower-margin vehicle sales represented 61 per cent of total revenue, compared with 59.2 per cent in 2012. The group ended the period with like-for-like profit growth across all categories and a 30.8 per cent jump in revenue, while like-for-like revenue rose 13.2 per cent.
