- Vertu Motors reports record-breaking sales.
- Acquisitions drive revenue growth.
- Strong outlook amid market challenges.
A series of acquisitions made by Vertu Motors in the past year have contributed to the company’s record-breaking first-half sales.
For the six months ending in August, the revenue of Britain’s third-largest automobile dealer increased by 21.1% to £2.42 billion, with acquisitions accounting for more than 60% of the increase.
The performance has prompted Vertu’s board to propose an interim dividend increase of 21.4% to 0.85p per share.
Helston Garages, which Vertu acquired for £182 million in December 2022, contributed nearly £250 million to the increase in revenue during the half. Helston Garages was Vertu’s largest acquisition to date.
The acquisition has considerably expanded the Gateshead-based group’s presence in South West England and added Volvo and Ferrari automobiles to its inventory.
As a result of acquiring two locations from the Saltaire Motor Company in Yorkshire, the company became the largest BMW motorcycle dealer in the United Kingdom, thereby boosting sales.
In the first half of the year, Vertu sold 95,409 automobiles, an increase of 11.4% compared to the previous year.
Used vehicle sales increased by only 10.9% to £947.8 million, whereas new vehicle purchases increased by roughly a third to £744 million.
Since the onset of the coronavirus pandemic, the average price of a vehicle sold has risen significantly, which has benefited the economy.
This is primarily due to the release of pent-up demand as a result of the mid-2021 easing of lockdown restrictions and semiconductor shortages influencing the production of new motors.
Even though the average price of used electric vehicles has decreased over the past year, prices for used automobiles are approximately 25 percent higher than in January 2021.
The combination of higher prices and unit sales contributed to the London-listed company’s 11.9 percent increase in pre-tax profits to £31.5 million.
Despite significant cost-of-living constraints affecting British consumers, Vertu reported a robust performance in September, buoyed by an improving supply of vehicles, and anticipates profits for the fiscal year ending in February 2024 will be in line with projections.
Future consumer confidence levels will be crucial in determining future retail vehicle demand, and the board remains cautious in this regard, according to Vertu executives.
The board believes the group is well positioned to execute on its stated strategy and capitalize on expanding opportunities in the UK market, with a strong pipeline of bolt-on acquisitions.
At 71.6p on Wednesday afternoon, shares of Vertu Motors were up 2.1 percent, or 1.5 pence, representing a 36 percent increase since the beginning of the year.
