Things look fine and dandy at car retailer Vertu Motors (VTU). The group reported a 9 per cent increase in like-for-like vehicle volumes last year, while profits per unit also increased as the group acquired premium brands such as Jaguar Land Rover, Alfa Romeo and Infiniti.
These acquisitions, as well as those made in previous years, account for the surge in reported group sales since 2012. In fact, 41 per cent of last year's revenues relate to dealerships bought in the past four years. "That shows the immaturity of our group relative to the competition and gives us opportunities to grow," says chief executive Robert Forrester.
But Vertu performed well even stripping out last year's acquisitions. Underlying sales jumped 11 per cent to £173m, driven by 6 per cent growth in new car sales, 9 per cent growth in used car sales, and a 3 per cent increase in higher-margin aftersales. The upshot was that adjusted operating profits grew by more than a quarter to £22.7m.
Current trading is well ahead of expectations, with profitability at record levels. Mr Forrester said strong volume growth should counter the risk that margins in the used car business slip as supply in the market increases.
Liberum expects adjusted pre-tax profit of £25.6m this year, giving EPS of 5.9p, up from £22m and 5.1p in full year 2015.
| VERTU MOTORS (VTU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 58p | MARKET VALUE: | £198m | |
| TOUCH: | 58-59p | 12-MONTH HIGH: | 62p | LOW: 51p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 53p* | NET CASH: | £15.7m | |
| Year to 28 Feb | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 1.00 | 5.3 | 2.0 | 0.5 |
| 2012 | 1.09 | 5.5 | 2.5 | 0.6 |
| 2013 | 1.26 | 4.4 | 1.7 | 0.7 |
| 2014 | 1.68 | 15.8 | 4.2 | 0.8 |
| 2015 | 2.01 | 21.0 | 4.9 | 1.1 |
| % change | +19 | +33 | +17 | +31 |
Ex-div: 25 Jun Payment: 28 Jul *Includes intangible assets of £52.8m, or 15p a share | ||||
