Major UK automotive retailer Vertu Group saw record revenues over the past year, despite what it describes as “stalled demand” for electric vehicles (EVs).

The Group, which has 188 sales and aftersales outlets across the UK, saw revenues of £4.7 billion in the year to 29th February 2024, adjusted profit before tax down from £39.3 million in 2023 to £37.8 million, described as being in line with market expectations.

Operating expenses as a percentage of revenues fell 0.2% to 9.7% following strong cost disciplines and despite inflationary pressures. Used-car margins weakened in the second half of the year due to price corrections in the market but had stabilised by year-end, and aftersales delivered a strong performance with like-for-like revenue up 8.6% and Core Group gross profit up £13.2m compared to the 2023 financial year.

Vertu has also made a strong start to the new financial year, describing March and April 2024 as successful months.  The Group delivered new retail like-for-like sales volumes ahead of the market decline in March and April, which a spokesman said demonstrates the robustness and strength of the Group’s operations.

There remain concerns, however, over the health of the battery-electric vehicle market, Vertu describing sales growth in the UK as stalled.  With Government-mandated targets for the sales of EVs increasing over the coming years there is a risk that the industry will fall short of these targets, and with the threat of significant fines on manufacturers missing targets, there is a greater risk of potential market volatility later in the year and beyond. Some manufacturers including Ford have threatened to restrict the sale of combustion-engined cars in order to avoid missing EV sales targets and the resultant fines.

Vertu Chief Executive Officer Robert Forrester (pictured above) described the results as pleasing, the Group successfully navigating a difficult period of trading with declining used car values in the last few months of 2023.  “Used vehicle prices and margins have now stabilised and there has been strong cash generation from lower working capital reducing net debt below market expectations,” Forrester said.