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.
Analysts at Liberum expect adjusted pre-tax profits of £30.8m for the year ending February 2017, giving EPS of 7.1p, compared with £27.4m and 6.3p in FY2016.
VERTU MOTORS (VTU) | ||||
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ORD PRICE: | 59.3p | MARKET VALUE: | £235m | |
TOUCH: | 59-59.75p | 12-MONTH HIGH: | 79p | LOW: 56p |
DIVIDEND YIELD: | 2.2% | PE RATIO: | 10 | |
NET ASSET VALUE: | 50p* | NET CASH: | £23.1m |
Year to 29 Feb | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
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 | 2.07 | 21.0 | 4.9 | 1.1 |
2016 | 2.33 | 26.0 | 6.1 | 1.3 |
% change | +12 | +24 | +24 | +24 |
Ex-div: 23 Jun Payment: 26 Jul *Includes intangible assets of £71m, or 18p a share |