“The key message is we are now starting to drive greater returns out of the business for shareholders,” Vertu Motors (VTU) chief executive, Robert Forrester, said as the group reported a shining set of half-year results, which saw new car retail sales volumes rise 19.6 per cent on a like-for-like basis.
Growth was underpinned by a favourable new car market where manufacturers are offering consumers attractive financing deals, which makes buying a new car today more affordable than it was five years ago. New car sales soared 40 per cent to £264m. Used car volumes did well, too, rising 3.9 per cent, with sales up 32 per cent to £283m and profits grew strongly thanks to higher pricing. The fleet and commercial business forged ahead, leaving total vehicle sales 18 per cent higher at £765m.
The aftersales business, which accounted for roughly 40 per cent of group profit, was the real star, boasting 7 per cent like-for-like sales growth and improved margins - the strongest performance to date according to Mr Forrester. This reflected higher volumes, but also the success of Vertu's customer retention strategy based around selling more service plans. Operational gearing has started to rev up, too, as the cost to sales ratio fell from 10.6 per cent to 10 per cent.
| VERTU MOTORS (VTU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 61.5p | MARKET VALUE: | £ 207m | |
| TOUCH: | 61-62p | 12-MONTH HIGH: | 62.25p | LOW: 34.5p |
| DIVIDEND YIELD: | 1.2% | PE RATIO: | 27 | |
| NET ASSET VALUE: | 47p* | NET CASH: | £25.7m | |
| Half-year to 31 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 628 | 5.10 | 1.96 | 0.25 |
| 2013 | 809 | 8.61 | 2.56 | 0.30 |
| % change | +29 | +69 | +31 | +20 |
Ex-div:23 Dec Payment:24 Jan *Includes intangible assets of £40.5m or 12p a share | ||||
