Buy, buy, buy, build, build, build. That's the name of the game for motor retailer Vertu (VTU) right now. Following the end of the last financial year in February, the group tapped investors for a further £35m to top up its coffers and fund future acquisitions. Since March 2015, Vertu has acquired 16 new dealerships, including Audi, Honda, Volkswagen, Mercedes-Benz and Jaguar. Thanks to stable gross margins and improved profitability across the recently acquired sites, group adjusted cash profits improved by nearly a quarter last year.
But Vertu has proved it can still grow without the help of its buy-and-build strategy. Last year, like-for-like group revenues still grew 7.3 per cent to £143m, while service revenue rose 6.5 per cent on the same basis. There's been a "big effort", according to chief executive Robert Forrester, to sell higher-margin service plans and a "significant overhaul in used car marketing" to boost volumes there, too.