Vertu Motors plc has published interim results for the six months ended 31 August 2017. The group used the announcement to signal a record profit before tax, up 29.4% to £24.2m on revenues that equaled the same period in 2016 at £1.45bn.
The interim results included some sobering detail, with like-for-like new retail volumes down 14.7%, fleet car supply volumes down 4.3% and light commercial van volumes down 9.6%.
However like-for-like service revenues up 4.4% continuing the long term growth trend in aftersales built upon a stregy of customer retention via service plans. The Group now has 104,142 (2016 H1: 97,427) customers who are paying monthly for their service and MOT on the Group’s own plans.
Aftersales operations accounted for an increasing proportion of the Group’s revenues (8.0% of revenues (2016 H1: 7.8%)) and earned 40.4% of the Group’s gross profit in the Period (2016 H1 : 39.1%). Total aftersales gross profit rose £1.3m year on year with core gross profit up £1.7m; the difference is due to closures and disposals of dealerships. Vertu has also notched up its twelfth successive six-month period of like-for-like used vehicle volume growth, up 1.1%.
Commenting on the results, Robert Forrester, Chief Executive, said:“The Board is pleased to see further growth in used car volumes and aftersales revenues against a back drop of the weakness of Sterling reducing the supply and increasing the prices of new cars. Pleasingly, underlying operating expenses reduced year on year in the Period as a result ofmanagement focus at a time of increasing costs across the industry. Our Group’s net cash position, strong property portfolio and very low level of used vehicle stock financing places us in a unique position to take advantage of consolidation opportunities and to continue to increase returns to shareholders. The Board is confident that opportunities to expand the business will arise in the next 18 months and these are likely to be at more attractive valuations.”
Vertu, who operate the Bristol Street, Vertu , and Macklin Motor group’s now has a portfolio of 121 franchised and 3 non-franchised operations across England and Scotland.