Vertu Motors (VTU) achieved a record £1bn of sales in the first half, as new and used cars flew off the forecourts. Adjusted pre-tax profit increased by over a half to £13.3m.
Volumes of new, used and fleet cars motored 12 per cent ahead on a like-for-like basis, while sales of commercial vehicles were up by nearly a third. Acquisitions made in previous years were a further contributor to growth. The businesses were underperforming when Vertu snapped them up, but have since been transformed. Aftersales were also key. Revenue here rose 4 per cent, and profitability improved as higher volumes boosted efficiency. Vertu is highly operationally geared: even though operating costs grew 20 per cent, as a proportion of total sales they fell from 10 per cent to 9.4 per cent.
Chief executive Robert Forrester told us he was confident for the remainder of the financial year. September service revenues were ahead by nearly 9 per cent, and new car volumes in the month also grew 9 per cent - against 6 per cent growth in the wider market. He added that Vertu would continue to make acquisitions and buy freehold property. Prior to the results, Liberum Capital upgraded its full-year EPS forecast by 12 per cent to 5p, from 4.6p in 2014.
| VERTU MOTORS (VTU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 57p | MARKET VALUE: | £194m | |
| TOUCH: | 56-58p | 12-MONTH HIGH: | 68p | LOW: 51p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 51p* | NET CASH: | £34.4m | |
| Half-year to 31 Aug | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 0.84 | 8.6 | 2.6 | 0.3 |
| 2014 | 1.08 | 12.8 | 3.0 | 0.35 |
| % change | +29 | +49 | +17 | +17 |
Ex-div:29 Dec Payment:23 Jan *Includes intangible assets of £51.2m, or 15p a share | ||||
