The 124 site Vertu group, has recorded its fifth consecutive year of growth in revenues and profits, confirming a £2,822.6m revenue for the year ended 28 February 2017.
Revenues were up 16.5% (£399.3m) to £2,822.6m (2016: £2,423.3m), and by 4.4% (£99.4m) on a like for like basis. The growth in revenue was driven largely by higher volumes in used car sales. Overall vehicle revenues grew by 16.2% in the year and amounted to 92.0% of total revenues (2016: 92.2%), whereas total aftersales revenues grew by 20.1% and amounted to 8.0% of total revenues (2016: 7.8%). On a like-for-like basis the group saw gross margins strengthened from 10.9% to 11.1% aided, in part, by the enhanced mix of the business towards higher margin aftersales activities.
Vertu’s aftersales business represents 8.0% of total revenues, but it accounts for 39.3% of gross margin. As such it is a key area of focus for the group and delivered like-for-like gross profits growth of £4.6m (4.7%) in the period. Vertu sold over 80,000 used vehicles for the first time with year- on-year volume growth of 13.9%.
On a like for like basis used vehicle volumes were up 7.1% in the period yielding gross profit growth of £10.6m in the period representing an increase of 13.3%.
In the new vehicle retail market Vertu delivered over 41,000 units in the year. New retail vehicle volumes grew by 4.4%, while like-for-like volumes fell by 6.4%. The group attributes the decline in volume to the impact of the fall of Sterling against the Euro and other currencies following the Brexit Referendum. Like-for-like new vehicle gross margins were stable at 7.4% while gross profit per unit increased by 5.2% to £1,196 (2016: £1,137). The Group’s like-for-like new vehicle gross profits declined by £1.0m.
Robert Forrester, Chief Executive of Vertu commented:“Since our inception ten years ago, Vertu has remained focused on consolidating the UK automotive retail sector to grow a scaled and sustainable dealership business. Today’s results, our fifth consecutive year of growth, evidences our continued delivery of this strategy. Significant acquisitions have been integrated through the year and have enriched the premium mix of the franchise portfolio. Record Profit before Tax of £29.8m represented a 14.6% increase for the Group, EBITDA rose to over £40m for the first time and cash conversion was excellent.”
Peter Jones, Group Chairman, added: “The Board is reporting a further year of strong growth, exhibiting record levels of revenue, operating profit, earnings per share and dividends. These results demonstrate that the Group remains set for further growth, well positioned with Manufacturers and in a healthy financial position. I remain optimistic about the Group’s growth prospects underpinned by a very strong balance sheet.”
“While the Board is aware of the wider reporting of the UK entering a more cautious consumer environment, trading in the post year-end period has been strong. The Board remains confident about the Group’s prospects for the current financial year and in delivering further progress in enlarging the scale of the Group.”
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