TIDMVTU
RNS Number : 7737B
Vertu Motors PLC
05 October 2022
5 October 2022
Vertu Motors plc ("Vertu", "Group")
Unaudited interim results for the six months ended 31 August
2022
" Full year profits anticipated to be ahead of market
expectations"
Vertu Motors plc, the automotive retailer with a network of 160
sales and aftersales outlets across the UK and a sector leading
online presence, announces its interim results for the six months
ended 31 August 2022 ("the Period").
Commenting on the results, Robert Forrester, Chief Executive,
said:
"The first half has seen a strong trading performance with
vehicle margin strength offsetting market driven volume shortfalls.
The Group continues to benefit from its focus on operational
excellence around cost, conversion and customer experience aided by
continued digitalisation initiatives. Cashflow generation has been
strong and the dividend for the first half has increased again.
The business is strategically very well placed with significant
firepower to expand its footprint of franchised dealerships across
the UK."
FINANCIAL SUMMARY
H1 FY23 H1 FY22 FY22
Revenue GBP1,999.7m GBP1,924.1m GBP3,615.1m
Adjusted(1) profit before
tax GBP28.2m GBP51.8m GBP80.7m
Free Cash Flow GBP23.2m GBP63.6m GBP44.2m
Basic Adjusted(1) EPS 6.50p 11.32p 17.92p
Dividends per share 0.70p 0.65p 1.70p
Net Cash / (Debt)(2) GBP17.8m GBP57.3m GBP16.2m
HIGHLIGHTS
-- Delivery of strategy to grow scaled franchised dealership
group with commencement of operations of Toyota in the West of
Scotland
-- Revenues grew 3.9% and the Group is now anticipated to be the
fourth largest automotive retailer in the UK by revenues
-- Market share growth in all new vehicle channels with 6% new van market share achieved
-- Adjusted(1) profit before tax of GBP28.2m (H1 FY22: GBP51.8m), on revenues of GBP2.0bn
-- Gross margin of 11.2% (H1 FY22: 11.6%) reflects continued
strong pricing disciplines in all areas
-- Free Cash Flow of GBP23.2m in the Period and Net Cash(2) of
GBP17.8m (28 February 2022: GBP16.2m)
-- Net tangible assets per share of 71.2p (28 February 2022:
66.8p) reflecting strong asset base and cashflow generation
-- 10.5m shares (representing 2.9% of share capital in issue on
1 March 2022) repurchased at a cost of GBP5.9m since 1 March
2022
-- Increased interim dividend of 0.70p per share declared, up
from 0.65p in H1 FY22, payable in January 2023
CURRENT TRADING AND OUTLOOK
-- The Board now anticipates that full year profits will be ahead of market expectations
-- Strong performance delivered in key month of September despite ongoing supply constraints
-- New and used vehicle supply constraints continue to be offset by continued higher margins
-- Aftersales demand remains robust and increased technician
resource is now in place to drive revenues
-- First major franchise to implement agency model on new retail
sales will be Mercedes-Benz on 1 January 2023
-- Cost pressures evident, particularly energy costs. Energy
strategy developed and being executed including approved capital
investment. Cost is a key management focus
-- Government action regarding energy costs and National
Insurance rates will benefit the Group in the second half
-- Strong acquisition pipeline in place
(1) Adjusted to remove share-based payments charge and
amortisation of intangible assets
(2) Excludes lease liabilities, includes used vehicle stocking
loans
Webcast details
Vertu management will make a webcast available for analysts and
investors this morning on the Group's website
https://investors.vertumotors.com/results/
For further information please contact:
Vertu Motors plc
Robert Forrester, CEO Tel: 0191 491 2121
Karen Anderson, CFO
Zeus Capital Limited
Jamie Peel Tel: 020 3829 5000
Dominic King
Camarco
Billy Clegg Tel: 020 3757 4983
Tom Huddart
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
CHAIRMAN'S STATEMENT
The Group continued to execute well during the period ended 31
August 2022, delivering an Adjusted(1) profit before tax of
GBP28.2m. This is the second highest in the Group's history. There
were significant highlights in the Period:
-- Enhancements to the Group's technological capabilities
continue to be piloted and rolled out. Transparent, unified part
exchange valuation capability is in place online and offline.
Customer experience in service is being enhanced by the rollout of
digital self-service check-in capability.
-- Successful growth exhibited via the continued roll-out of
multi-franchise dealerships. Further progress in growth shown in
developing the new West of Scotland Toyota business, and the
acquisition of Wiper Blades Limited, an online retailer.
-- Strong people focus, with the delivery of enhanced benefits
to colleagues, enrichment of training opportunities and improved
engagement through colleague forums. The Group has continued to
record excellent scores in quarterly colleague satisfaction
surveys.
-- Enhanced brand awareness through media presence and the
commercial partnerships of the Group's three trading brands:
Bristol Street Motors, Vertu Motors and Macklin Motors.
I am very proud to see how every colleague has contributed to
the success of the Group and I would like to thank them for this.
The Board continues to function well and undertook a review of the
Group's strategy and execution against it during September. I
believe that progress in this regard has been strong and the next
twelve months should see this progress continue.
The Group's excellent financial position, continued investment
in its colleagues and systems and its established track record of
execution gives me confidence that we will continue to deliver on
our strategic objectives. The Group has the scale and firepower to
take advantage of the considerable sector changes working in
partnership with the Group's Manufacturer partners through
accretive consolidation of this fragmented market.
Andy Goss, Chairman
(1) Adjusted to remove share-based payments charge and
amortisation of intangible assets
CHIEF EXECUTIVE'S REVIEW
Update on Strategy Execution and Associated Risks
The Group's key long-term strategic objectives were summarised
in the Annual Report issued in May 2022. The core goal is: To
deliver growing, sustainable cashflows from operational excellence
in the franchise automotive retail sector. The strategic objectives
of the Group are set out below:
-- To grow as a major scaled franchised dealership group and to
develop our portfolio of Manufacturer partners, whilst being
mindful of industry development trends, to maximise long-run
returns.
-- To be at the forefront of digitalisation in the sector,
delivering a cohesive 'bricks and clicks' strategy:
o Optimise our omnichannel retail offering through leveraging
the 'Click2Drive' technology and utilising this important sub-brand
to promote its usage.
o Digitalise aftersales processes to improve customer
service.
o Reduce the cost base of the Group by delivering efficiency
through the use of technology.
o Utilise data driven decision making to generate enhanced
returns.
-- To develop and motivate the Group's colleagues to ensure
operational excellence is delivered constantly across the
business.
-- To develop ancillary businesses to add revenue and returns
that complement the core business.
An update on progress in executing this strategy over the Period
is set out below:
1. Developing the Scale of the Group
The Group has an excellent financial, operational and
technological platform allowing it to capitalise on sector
opportunities:
-- Financial capacity
The Group's balance sheet strength is underpinned by a
significant freehold and long leasehold property portfolio with a
net book value of GBP243.8m and a net cash position at the end of
the Period of GBP17.8m. There is significant opportunity to
leverage the strong balance sheet to provide firepower for
acquisitive growth. The Board has a conservative attitude to debt
funding, targeting a long-term debt to EBITDA ratio of sub 1.5
times and has a preference to match the term of debt to the nature
of secured assets. For example, this may include the use of
longer-term mortgage type debt, with security over freehold
property assets provided. The Group's capital allocation
disciplines include a rigorous assessment of potential acquisitions
to ensure appropriate return hurdle rates are met. High sector
earnings over the last 18 months will be disregarded by the Group,
particularly in a cost inflationary environment, when assessing
acquisition opportunities to ensure appropriate deployment of
capital. The Group will continue to apply this very disciplined
approach to accretive, acquisitive growth ensuring only the right
opportunities are executed to drive long-term success and
shareholder value.
-- Management capacity
The Group has a stable and experienced senior management team,
with an established track record of execution and performance
delivery. The senior management team was augmented in the Period
with the appointment of a Chief Technology Officer (CTO). Bruce
Clark was promoted into this newly created role, which has a place
on the Group's CEO Committee, in April 2022. This appointment
marked a further step change in the Group's focus on technology
strategy and the management bandwidth to deliver the Group's
strategic technology plans. Further recruitment was undertaken to
backfill Bruce's previous role, appoint a new Head of Data and
augment management and capability in digital marketing.
The senior management team has very much an "owner" mentality
and sets the "tone from the top" to ensure that the Group's culture
is appropriate and consistent across all its operations. This
ensures the d elivery of the Group's Mission Statement ("To deliver
an outstanding customer motoring experience through honesty and
trust") through application of the Group's Values
("Professionalism, Passion, Recognition, Integrity, Respect,
Opportunity and Commitment").
-- Operational systems platform
The Group's in-house developed systems provide uniform processes
and control, as well as live management information and data to
allow speedy and appropriate decision making. These systems
continue to be developed and improved. Acquired businesses are
quickly migrated onto this scalable technology and process platform
to ensure control is quickly established, performance improvement
opportunities are highlighted, and synergies maximised. The scale
of the Group allows ongoing investment in systems development to
augment the Group's customer offering and to drive efficiencies in
process automation.
-- Brand strength
The Group operates three major customer facing brands in the UK:
Bristol Street Motors, Macklin Motors and Vertu Motors. Bristol
Street Motors remains one of the top three sector brands. Each of
the Group's brands are supported by extensive TV campaigns, sports
sponsorships, partnerships and digital marketing initiatives.
-- Execution of growth strategy in the Period
The Group has the brand strength and financial, operational, and
management capabilities to continue to add additional franchised
outlets to the business. We are ambitious to do so. The Group also
continues to evaluate and execute multi-franchising actions in its
locations to maximise the long-term profitability of each
location.
The Period saw the Group execute on this strategy for growth as
set out below:
-- On 1 April 2022 the Group opened Macklin Motors Toyota in
Darnley, South Glasgow. This dealership represents the first of a
number of dealerships to be opened, following the Group being
awarded the Toyota franchise in the West of Scotland territory. The
second dealership, located in the Group's former Ford premises in
Hamilton, will open in October 2022 following the completion of a
showroom refurbishment to Toyota standards.
-- On 1 May 2022, the Group opened a further Bristol Street
Motor Nation used car outlet in newly acquired leasehold premises
at Stockton, Teesside. This is a large used car operation in a
prime location in the town.
-- Work is being finalised on the introduction of sales outlets
for Vauxhall and Citroen alongside the Group's Peugeot operation in
Harlow. The outlets will open later this month and follow the move
of the aftersales operation off site to a new larger dedicated
aftersales operation.
-- The LEVC franchise commenced covering Scotland and the North
East of England as part of the Group's Taxi Centre operation.
Pruning activities were undertaken in the Period. The Group's
single Jeep sales outlet in Beaconsfield ceased operation and the
Ford outlet in Hamilton closed to allow for the redevelopment of
the site for the Toyota franchise alongside Mazda. In addition, the
Group closed its accident repair centre in Chesterfield in the
Period in order to facilitate further multi-franchising
opportunities.
On 1 July 2022, the Group also executed on its strategy to add
complementary ancillary businesses with the purchase of Wiper
Blades Limited for a net cash consideration of GBP2.3m. This
business complements the Group's existing Sittingbourne based
AceParts online parts sales operation, which sells to consumers via
Marketplaces, and augments the Powerbulbs business purchased in
March 2021, adding another parts ecommerce website, with good reach
and rankings, to the Group's online parts business.
2. Digitalisation Developments
-- Omnichannel retail sales developments
The Group was the first UK retailer in 2017 to offer full online
retailing of used cars in the UK and continues to be at the
forefront of developments to provide customers with innovative ways
to purchase and interact online. The Group's online retailing
proposition is branded 'Click2Drive' supported by the Group's
sponsorship of 'W-Series' racing, under the Bristol Street Motors
brand umbrella. In October 2021 the Group launched the concierge
service to increase conversion of sales online. The concierge acts
as a personal shopper for customers online, co-ordinating all
interaction with the customer, including liaison with the Group's
160 sales outlets. Over 850 vehicles have now been delivered to
Group customers using this service, since its launch in late
October 2021.
Further development of the Group's sales process has been
undertaken to further align the online and dealership customer
sales journey and improve efficiency. The Group's used car
inventory analytics and pricing system, already in place across the
dealership network for inventory management, has now been linked to
the Group's sales system to provide part exchange valuations to
customers whether online or in the showroom. This results in a
transparent and unified part exchange valuation to customers
irrespective of customer journey and provides great consistency of
valuation. The early signs are that this innovation is augmenting
used car margins, increasing part exchange rates and providing an
enhanced omnichannel experience.
-- Digitalisation of aftersales
The Group's aftersales functions, which include vehicle service
and mechanical repair, accident repair and parts supply, represent
a significant and important proportion of overall profitability. As
seen in the digitalisation of sales processes, there is also an
increasingly important role for digital within aftersales
operations.
The Group's customers have long been able to book their vehicle
service appointment fully online, and over 40,000 service bookings
were made online in the Period, a growth of 10% compared to H1
FY22. Customers in the Group's BMW dealerships are now also able to
utilise self-service check in technology when attending a
dealership for a vehicle repair or service. 'ATM' style machines in
the dealership capture customer details and allow customers to
select additional products, such as four-wheel alignment, air
conditioning decontamination or even whether they wish to have
their vehicle cleaned whilst with the Group. The technology also
asks the customer to confirm where they have parked their vehicle
on site before allowing them to safely deposit their vehicle keys.
The technology is integrated into Group systems and can allow the
further development of self-service check out and payment. Group
experience to date shows this technology results in improved add-on
sales, and enhanced customer experience and productivity levels.
These systems will be rolled out across all Group aftersales
operations in the coming months.
Accessory sales post vehicle delivery are also being enhanced in
pilots within the Group using the interaction of targeted emails
with full online retailing capability via Group shops within
digital market places.
There remains significant opportunity for further digitalisation
of the customer aftersales journey and the Group is working on
several developments in this regard to ensure that customers are
delighted and retained, efficiency is enhanced and costs
reduced.
-- Digitalisation to improve efficiency and reduce cost
The Group has always been very focused on the detailed
management of its cost base and has been successful in the
digitalisation of processes to drive efficiency and therefore
reduce costs per transaction. We have continued to develop
significant Robotic Process Automation (RPA) capacity, and our
Robots are currently executing a major customer data cleanse. This
aids efficiency by ensuring our outbound marketing activity is
targeted only at customers who still own the vehicle. The Group now
has so many Robots, operating to avoid manual data processing in
various areas of our activity, that we have Robots who manage the
Robots. The Group is also in the process of rolling out digital
payment solutions for both vehicle and aftersales payments via open
banking, again improving flexibility for customers while increasing
payment security and reducing payment transaction costs.
3. Recruiting, Retaining and Developing Colleagues
It is a priority of the Group to develop and motivate the
Group's colleagues to ensure the delivery of operational
excellence. One of the most significant challenges in the business
remains workforce recruitment and retention. The number of UK job
vacancies remains at high levels and there is low unemployment. The
Group saw high vacancy levels throughout the Period in line with
the wider UK, with Group colleague turnover rising back to historic
pre-pandemic levels.
A number of initiatives have been undertaken to ensure that the
Group remains an employer of choice in the sector. The Group
launched dealership colleague forums in FY22, a formalised way in
which colleagues of all levels can provide their feedback on work
matters. Forums have had access to the Non-executive director for
colleague engagement, Pauline Best, and action has been taken on
much of the feedback received. For example, enhanced pay and
benefits, such as increased holiday entitlement for long serving
colleagues, have been applied. Vacancy levels in the Group have
significantly reduced in recent months to approximately 400
vacancies.
The Group has long been committed to extensive investment in the
development of all colleagues to provide opportunity to those who
are talented and driven to succeed. Current programmes include a
degree apprentice scheme, technician and customer service
apprentice schemes. Development programmes to facilitate
progression to management roles have been scaled up reflecting the
increased size of the Group and to increase overall management
capability.
4. Priorities of Cost, Conversion and Customer Experience
Considering the inflationary cost pressures facing the Group,
which have not been previously evident over the Group's 16-year
history, three management priorities were established at the start
of the current financial year: Cost, Conversion and Customer
Experience.
a) Cost management
The right mindset and culture of cost management is vital. The
Group relaunched its 'War on Waste' initiative to drive behavioural
change, particularly around energy use, given escalating costs. A
5.3% reduction in the Group's electricity consumption was achieved
in the Period when compared to the six-months ended 31 August 2021.
These energy savings were largely delivered through improved
housekeeping and behaviours. The Group is currently in the process
of rolling out LED lighting across its dealership network which
will be complete by the end of September 2023. As an example, LED
lighting installed in the Group's central services building in
Gateshead in April 2022 has delivered a 10% electricity usage
reduction.
The Board have recently approved a GBP3m capital expenditure
programme for the next 12 months to invest in solar power
generation capability at 46 of the Group's freehold properties.
This investment is intended to generate around 10% of the current
Group's electricity requirement and has an expected payback of
around 4.5 years. This will aid energy security for the Group and
reduce overall expected costs compared to using the grid in the
future.
Savings on gas usage were also delivered in the Period, aided by
the warmer conditions experienced in the UK. The Group is
nevertheless focused on maintaining strong disciplines in the use
of gas as we enter the winter months.
The Group continues to focus on cost management and the
identification of further areas of saving or efficiency of process.
These efforts continue to be co-ordinated by the long-standing
Bureaucracy, Efficiency and Productivity committee which meets
bi-monthly and is chaired by the CEO.
b) Maximisation of conversion of enquiries to revenues
The Group is seeking to increase the conversion of opportunities
to revenues in both the sales and aftersales areas through a focus
on process, measurement and use of technology. Maximising the
return from the Group's significant marketing spend is a key
priority. Examples of developments in this area include:
-- Simplification of part-exchange valuation and automated first
offers so that customers can be quickly provided with the cost to
change their car without any need for management involvement.
-- Roll out of "Reserve it Now" functionality allowing GBP99
vehicle deposits to be taken on-line, via concierge personal
shoppers, or in the dealership. This functionality has been
embraced by customers, with over 1,500 "Reserve it Now" deposits
taken in August 2022 alone. Overall, conversion to a sale when such
a deposit is taken was over 60%.
-- Enhanced follow up of lost sales opportunities through digital and contact centre activity.
-- The concierge function enhancing online sales conversion.
-- Enhanced training capability in sales and service to ensure
all colleagues have the right skills.
-- Continuation of the industry's most extensive phone and
physical visit mystery shopping programme to ensure processes and
customer experiences are robust and training needs identified:
Scores have significantly increased over the Period.
-- Self-service check-in in service increasing add-on sale penetration.
-- All inbound retail parts sales enquiries now routed to a
central team of parts experts in Gateshead to make the sale,
ensuring enhanced consistency of process and customer
experience.
c) Customer experience to drive retention and further sales
Delivery of the Group's Mission 'to deliver an outstanding
customer motoring experience through honesty and trust' remains
vital to improving retention of customers into both the Group's
service departments and for future vehicle sales. Great experiences
boost retention, recommendation rates and profit per transaction.
In addition, positive online reviews provide a fantastic and vital
window into the Group's service delivery for prospective
customers.
The Group is targeting a significant improvement in the
retention of vehicle sales customers, through the execution of its
digitalisation and customer focused developments. This includes the
establishment of 'renewal hubs' for both new and used car sales.
Colleagues in these hubs contact previous customers at the time
they are likely to be in the market to change their vehicle to
create consequent sales opportunities.
The Group has also developed a digital "Recommend a Friend"
referral scheme to multiply the number of sales from the original
customer sale by encouraging customer referrals. The new system is
to be piloted in Macklin Motors in November.
Strategic Summary
Our experienced management team, strong brands, digital prowess
and financial strength, ensure the Group is well positioned to take
advantage of the opportunities arising and as a team, we remain
ambitious to do so. We will continue to innovate and execute to
ensure that the Group excels in meeting customer needs in order to
overcome any demand and supply headwinds that may arise. We will
ensure that capital is allocated to those activities, locations and
franchises that are best placed to meet the competitive challenges
arising and to provide the best growth opportunities and maximise
long-term return on invested capital. We will leverage our proven
strengths and execute on our business ideas such as cost saving
initiatives, continued development of our colleagues, accelerating
brand growth and pursuing new business opportunities. In essence,
we have a long-standing plan and will execute it.
Current Trading and Outlook
The Board now anticipates that profits for the financial year
ending 28 February 2023 will be higher than current market
expectations.
September trading saw a continuation of market trends seen in
the first half of the financial year. New car, fleet and commercial
volumes were subject to significant supply constraints and
uncertainty. Volume shortfalls were again offset in part by strong
margins. Manufacturer bonus levels on a quarterly basis reduced,
due to the volume trends. Overall new car, fleet and commercial
profits were therefore down year on year.
Used car markets remain stable in terms of pricing, reflecting
supply constraints. Demand was subdued in the month as consumer
demand levels were impacted by energy concerns and the passing of
the Queen. Margins remained strong.
Service demand remained strong and higher technician resource
levels are helping to drive increased revenues. September was
impacted by the loss of aftersales revenue when the business closed
for the National Day of Mourning for the Queen's funeral.
Overall, profit levels in the month were, as anticipated, behind
last year, but September profitability was the third highest
recorded for this month in the Group's history.
A tight supply environment for new and used vehicles is
anticipated to continue well into the next financial year. Margins
are therefore expected to remain strong and used car pricing
robust. Higher resource levels in the Group should help to underpin
a strong aftersales contribution.
Future consumer confidence levels will be key in determining
retail vehicle demand and recent Government action around tax cuts
and support for energy prices give the prospect of supporting
consumer demand in the months ahead. The Board remains cautious in
this regard.
A number of the Group's Manufacturer partners are actively
involved in consulting on the introduction of agency models for the
sale of new retail cars. These models change the nature of the
profit and loss account for these sales and reduce working capital
requirements. Mercedes-Benz will be the first major Manufacturer to
make this transition on 1 January 2023. The Board does not
currently anticipate a material change to overall profitability
from these changes.
Cost control remains a major focus for management. Government
support for business energy costs in the next six months and a
reduction in employer's national insurance also provide some relief
from the inflationary pressures facing the Group and their impact
on costs.
The Board believes that the Group is very well positioned to
deliver on its stated strategy and to take advantage of the
increasing opportunities in the UK sector. A good pipeline of
acquisitions is apparent.
Robert Forrester, CEO
CHIEF FINANCIAL OFFICER'S REVIEW
The Group's income statement for the Period is summarised
below:
H1 FY23
Var to
H1 FY23 H1 FY22 H1 FY22
GBP'000 GBP'000 %
Revenue 1,999,712 1,924,134 3.9
---------- ---------- ---------
Gross Profit 223,721 223,121 0.3
----------------------------------------- ---------- ---------- ---------
Operating expenses excluding Government
support (192,417) (173,261) (11.1)
Government support(3) - 5,611 -
----------------------------------------- ---------- ---------- ---------
Operating expenses reported (192,417) (167,650) (14.8)
---------- ---------- ---------
Adjusted Operating Profit 31,304 55,471 (43.6)
Net Finance Charges (3,087) (3,638) 15.1
---------- ---------- ---------
Adjusted Profit Before Tax 28,217 51,833 (45.6)
Non-Underlying items(4) (1,278) (731) (74.8)
---------- ---------- ---------
Profit Before Tax 26,939 51,102 (47.3)
Taxation (5,416) (13,597)
---------- ----------
Profit After Tax 21,523 37,505
---------- ----------
(3) includes receipts under the Coronavirus Job Retention Scheme
and business rates relief
(4) Non-underlying items represent share-based payment charge
and amortisation of intangible assets
The Group delivered an adjusted profit before tax of GBP28.2m in
the Period, which was reduced, as anticipated, from the record
result delivered in H1 FY22 of GBP51.8m. Revenue grew to GBP2.0bn,
a growth of 3.9% aided by new and used average vehicle sales
prices. Despite these price rises, gross margin of 11.2% was
delivered which remains strong by historic standards, reflecting
supply constraints and strong pricing disciplines.
Revenue and Gross Profit by Department
An analysis of total revenue and gross profit by department is
set out below:
H1 FY23 H1 FY22 H1 FY23
Var to
GBP'000 GBP'000 H1 FY22
Revenue %
New 557,640 530,766 5.1
Fleet & Commercial 428,715 445,189 (3.7)
Used 854,466 804,792 6.2
Aftersales 158,891 143,387 10.8
---------- ---------- ----------
Total Group Revenue 1,999,712 1,924,134 3.9
Gross Profit
New 47,435 38,853 22.1
Fleet & Commercial 20,146 18,757 7.4
Used 67,113 82,361 (18.5)
Aftersales 89,027 83,150 7.1
---------- ---------- ----------
Total Gross Profit 223,721 223,121 0.3
Gross Margin
New 8.5% 7.3% 1.2
Fleet & Commercial 4.7% 4.2% 0.5
Used 7.9% 10.2% (2.3)
Aftersales(5) 45.4% 47.5% (2.1)
---------- ---------- ----------
Total Gross Margin 11.2% 11.6% (0.4)
---------- ---------- ----------
(5) Aftersales margin expressed on internal and external
revenues
The total volumes of vehicles sold by the Group and
like-for-like trends against market data are set out below:
Like-for-like
Change
H1 FY23 H1 FY22 (H1 FY23
% Var to
Total Units Total Units H1 FY22)
Used retail vehicles 43,022 49,697 (15.2%)
New retail cars 17,673 18,086 (7.0%)
Motability cars 4,711 4,865 (7.5%)
--------------------- ----------- ------------ -------------
Direct fleet cars 9,205 8,713 (5.5%)
Agency fleet cars 2,317 2,982 (31.9%)
--------------------- ----------- ------------ -------------
Total fleet cars 11,522 11,695 (12.2%)
Commercial vehicles 8,707 9,915 (14.8%)
----------- ------------ -------------
Total New vehicles 42,613 44,561 (10.2%)
----------- ------------ -------------
Total Vehicles 85,635 94,258 (12.8%)
----------- ------------ -------------
UK Market
Variance(6) (SMMT)
New Retail
Car (4.2%) (2.8%)
Motability
Car 11.8% (19.3%)
Fleet Car 15.8% (28.0%)
Commercial 10.7% (25.5%)
----------- ------------ -------------
(6) Represents the variance of like-for-like Group volumes to
the UK trends reported by SMMT
Used retail vehicles
The used vehicle market in the UK experienced unprecedented
market dynamics throughout 2021, as tightness in used vehicle
supply coincided with a period of strong customer demand for used
vehicles. These trends resulted in extraordinary increases in the
price of used vehicles in the UK, with three-year-old vehicles
increasing by one-fifth of their value from May to August 2021. In
2022, supply of used vehicles has remained constrained due to muted
new car registrations resulting in lower part exchange levels and
defleeting by fleets. Demand has stabilised as the 'pent-up' boost
post lockdowns eased. This balance in supply and demand has
resulted in stability of used vehicle pricing in the UK, despite
values remaining comparatively high. Average three-year-old vehicle
values dropped just 2.1% between May and August 2022, with a higher
decline of 5-8% historically expected over this same period. Group
gross profits per unit remain in excess of historic norms, although
there has been some decline from the extraordinary levels
experienced last year. The Group's like-for-like used vehicle
volumes were 15.2% lower in the Period reflecting the prevailing
supply and demand dynamics in the market compared to the
exceptional conditions of last year.
The Group monitors the pricing and supply environment and has
continued to develop its used vehicle pricing and analytical tools
to optimise gross profit generation and control inventory. The
Group appointed an experienced Head of Used Car Buying in August
2022 to facilitate additional central procurement of inventory,
augmenting the existing direct from consumer and dealership
purchasing activity. Ensuring a good supply of used vehicle
inventory will be vital in the next few years. Overall, despite
supply constraints, the Group increased the number of used retail
vehicles in inventory at 31 August 2022 compared to 28 February by
4%, whilst the overall value of used retail inventory was GBP5m
lower as pricing eased from the highs of 2021 and the Group
targeted older, lower priced vehicles.
As a result of the trends noted above, Group gross profit from
the sale of used vehicles totalled GBP67.1m for the Period (H1
FY22: GBP82.4m). The following like-for-like variances arose:
-- GBP15.8m reduction in gross profit generated from used vehicle sales
-- 15.2% less used retail units sold
-- Gross profit per unit of GBP1,579 (H1 FY22: GBP1,665)
-- Average selling price of GBP19,958 per unit, a 23.2% increase from H1 FY22 levels
-- Gross margin of 7.9% (H1 FY22: 10.3%) reflecting higher sales prices
New retail cars and Motability sales
UK retail registrations continue to be impacted by reduced
supply, driven by well documented component shortages (including
semi-conductors) and general global supply chain disruption. In the
light of these ongoing supply constraints, in July 2022 the SMMT
reduced its full-year outlook by 7% to 1.60 million units, from the
previous forecast published in April 2022 of 1.72 million.
Registrations at this level represent a significant reduction
compared to average UK new vehicle registration volumes
pre-pandemic. Against this backdrop, the Group's like-for-like new
retail vehicle volumes declined by 7.0% in the Period when compared
to the six months ended 31 August 2021. SMMT private registrations
declined by 2.8%. A number of the Group's volume franchises saw
significant curtailment of supply compared to the market in general
which impacts the Group's retail market share. New retail order
bank levels in this channel are at a record high reflective of
continued success of the Group's sales teams in taking orders.
UK Motability registrations were also impacted by supply
constraints and were lower by 19.3% in the Period, compared to the
six months ended 31 August 2021. Motability is a lower margin
channel and has seen more supply restrictions than the retail
channel in general. The Group represents the largest Motability
fleet in the UK, accounting for approximately 5% of scheme
customers. The Group consistently performs at a high level in terms
of Motability customer service, and in Q2 2022 received 25% of all
geographically awarded Motability dealer awards for that period.
The Group's Motability volumes in the Period were significantly
ahead of the market, declining by 7.5% on a like-for-like basis,
representing a UK market share of 5.6% (H1 FY22: 4.7%). This
outperformance reflected several of the Group's franchises
providing good supply into the channel relative to the overall
market and taking significant market share as customers on the
scheme sought to change their vehicle.
The Group saw significantly improved gross profit retention on
new vehicle sales, through the application of effective pricing
disciplines. Consumers continue to accept long lead times, with
order bank levels remaining very high. The Group is not
experiencing significant cancellation levels. Compared to the six
months ended 31 August 2021, the following trends were apparent on
a like-for-like basis for the New Retail and Motability sales
channel:
-- A GBP7.7m increase in gross profit generated, despite a 7.0%
reduction in the number of new retail units delivered
-- Gross profit per unit of GBP2,124, a rise of 25.7% from GBP1,690
-- An average selling price of GBP24,294 per unit, a 13.2% increase
-- Gross margin rose to 8.5% from 7.3%
-- Order bank of 13,000 new retail units and 6,500 Motability units at the end of the Period
Fleet & Commercial vehicle sales
The UK car fleet market remains perhaps the hardest hit by the
restrictions in the supply of new vehicles, as Manufacturers divert
limited capacity to higher margin, retail channels. Registration
volumes in the UK car fleet market have declined 28.0% in the
Period compared to the six months ended 31 August 2021.
Like-for-like, the Group delivered 10,190 fleet cars in the Period,
representing a decline of 12.2% compared to H1 FY22, which was
significantly ahead of the market trends. The Group continues to
invest in its fleet sales capacity in order to take market share.
Margins strengthened again with the Group adopting strong pricing
disciplines.
The Group saw a 14.8% fall in the like-for-like volume of new
commercial vehicles sold which represented an increase in market
share, with the market back 25.5% over the Period compared to the
six months to 31 August 2021. The market fall reflected supply
constraints and a moderating of demand after the demand frenzy
created by lockdowns on the courier and online delivery market for
vans.
When compared to the six-month period ended 31 August 2021, the
following fleet and commercial trends were seen on a like-for-like
basis:
-- A GBP1.0m increase in gross profit, despite the significant
reduction in the number of units sold
-- Record gross profit per unit of GBP999, a rise of 15.1% from GBP868
-- Gross margin rising to 4.7% from 4.2%
-- Strong forward order bank of over 24,000 units as at the end of August 2022
Aftersales
The Group's aftersales operations are a vital contributor to
Group profitability, generating almost 40% of total gross profit.
Due to the exceptional conditions in the petrol forecourt market in
the Period, the results for the Group's forecourt have been split
out. Overall, compared to the six-month period ended 31 August 2021
the following like-for-like trends in aftersales performance were
witnessed:
Accident
Parts & Smart Forecourt
Service Repair Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue(7) 80,457 93,264 9,866 6,747 190,334
Revenue(7) change 3,692 7,411 2,298 3,253 16,654
Revenue(7) change
(%) 4.8% 8.6% 30.4% 93.1% 9.6%
Gross profit
change 1,190 2,001 1,116 113 4,420
Gross margin(8)
H1 FY23 (%) 74.8% 22.5% 53.2% 5.9% 45.6%
Gross margin(8)
H1 FY22 (%) 76.8% 22.1% 54.7% 8.1% 47.4%
Margin change
(%) (2.0%) 0.4% (1.5%) (2.2%) (1.8%)
(7) includes internal and external revenues
(8) Aftersales margin expressed on internal and external
revenues
-- Service
Performance in the Group's service departments in 2021 was
impacted by higher-than-average levels of technician vacancies and
by covid related absences. To address colleague recruitment and
retention, a Group wide salary review was undertaken and
implemented for technicians in November 2021. The impact of this
review is apparent in the 2% reduction in gross margin as expected
with technician salary costs included in aftersales department cost
of sales. The Group has successfully increased the number of
technicians recruited in the Period.
The Group executed well on its retention and aftersales
processes, improving sales of additional work and products. The
Group's customer retention strategies focus on ensuring vehicle
sales customers return to the Group for their service, whether they
have purchased a new or used vehicle. Service plans, through which
customers pay monthly or upfront for their annual service are a
vital part of retention, with approx. 170,000 of the Group's
customers currently holding live service plans either with the
Group or its Manufacturer partners (28 February 2022: 160,000).
These initiatives meant that the Group delivered a 2.5% growth in
like-for-like retail labour hours sold in the Period. Overall,
despite the increase in retail labour hours sold, total service
labour hours declined because of a reduction in warranty work
undertaken by the Group on behalf of its Manufacturer partners. The
significant decline in the 0-3-year vehicle parc due to supply
constraints and the impact of lockdowns in recent years is the
major reason for this fall in warranty hours sold. Overall, the
vehicle parc is anticipated to increase in the UK between now and
2030 which will aid aftersales demand and help offset any negative
impact of electrification.
Like-for-like service revenues grew compared to H1 FY22 despite
the reduction in hours sold as an improvement in revenue generated
per labour hour was achieved and the Group was successful in
growing sales of add-on products such as tyres in the Period. Of
the 4.8% increase in like-for-like service revenues, approximately
two thirds arose due to an increase in the labour rates charged to
sales departments for internal work undertaken in the service
departments. This increase was implemented recognising higher
technician costs.
Like-for-like gross margin percentages on vehicle servicing fell
to 74.8% (H1 FY22: 76.8%) reflecting the rise applied to technician
salaries despite the rise in internal labour rates. Another factor
in the declining margin is that a significant number of technicians
have been recruited who are new to the franchise operated and their
efficiency is lower as they are trained and build their franchise
knowledge. There is also increased dislocation in parts supply to
the dealerships from Manufacturers which results in reduced
efficiency as the Group awaits parts to complete repairs.
-- Parts
Parts revenues in the Core Group grew GBP7.4m (8.6%) compared to
H1 FY22, as the Group gained market share and the accident repair
market returned to more normalised levels of demand. The
centralisation of inbound parts retail phone enquiries with orders
taken in Gateshead has contributed to increased parts retail sales.
Overall gross margins in parts rose from 22.1% to 22.5%.
-- Accident and Smart Repair
The Group continues to grow its Smart Repair operations,
increasing the size of the fleet to 120 cosmetic and alloy wheel
repair vans, up from 75, to serve both the Group's dealerships and
external customers across the UK. The expansion of these operations
has been vital as the Group has targeted the increased purchase of
older used vehicles for resale, and this has led to a significant
increase in demand for smart repair and alloy wheel refurbishment
services from the Group's dealer network.
The Group's accident repair centres are now operated in a new
standalone division, concentrating solely on the management of this
channel. An increase in accident repair revenues in the Period
arose from customer journeys reverting to more normal levels and an
increase in the number of vehicles being repaired rather than
written off as replacement vehicles were increasingly difficult and
more expensive for insurance companies to source. Operational
excellence levels have improved as the Group's dedicated management
have executed uniformity of systems and measurement.
The Group's accident and smart repair operative salaries were
reviewed as part of the Group wide review of salary levels
undertaken at the end of 2021. The result of this review has
reduced gross margins in this channel as anticipated.
-- Forecourt
The Group operates a single petrol forecourt in Widnes, Cheshire
which has historically been reported within Accident and Smart
Repair. Revenues doubled by GBP3.3m in the Period as the Group
sought to be competitive and to take increased market share versus
supermarket competitors. Margins reduced accordingly and litres of
fuel sold increased by 86% in the Period.
Acquisitions, Disposals and Closures
Acquisitions and new operations opened since 1 March 2021 are
not included in the Core Group for reporting purposes. These
operations made a loss before taxation of GBP689k (H1 FY22: Loss of
GBP134k). The Group commenced start-up operations in Glasgow with
Toyota and Stockton Motor Nation. Start-up losses arose as
anticipated. Disposals and closures in the Period represented a
loss of GBP87k relating to the closure of an accident repair centre
in Chesterfield.
Operating Expenses
A summary of Core Group operating expenses is set out below:
H1 FY23
Var to H1
H1 FY23 H1 FY22 FY22
GBP'm GBP'm GBP'm
Salary costs 108.4 99.8 8.6
Vehicle and valeting costs 18.5 17.5 1.0
Marketing costs 18.5 17.7 0.8
Property costs and rates 19.6 19.6 -
Energy costs 2.1 2.1 -
Other 19.7 14.8 4.9
Core Group operating expenses
before Government support 186.8 171.5 15.3
Non-Core operating expenses 5.6 1.8 3.8
-------- -------- -----------
192.4 173.3 19.1
Government support (CVJRS receipts
and rates relief) - (5.6) 5.6
-------- -------- -----------
Group Net Underlying Operating
Expenses 192.4 167.7 24.7
-------- -------- -----------
Reported underlying operating expenses of GBP192.4m, up
GBP19.1m, (excluding the impact of government support
(predominantly rates relief) in the prior period), compared to H1
FY22. Dealerships acquired in the period since 1 March 2021
contributed GBP3.8m of this increase with underlying Core Group
expenses up by GBP15.3m when compared to H1 FY22. These cost rises
were planned.
The most significant increase in cost arose within salary cost.
This saw an increase of GBP8.6m, representing approximately 60% of
the rise in Core Group expenses. This increase is analysed
below:
H1 FY23
GBP'm
Impact of new national minimum wage and NIC rate increase 2.0
Additional headcount 2.0
Pay awards 4.8
Commissions and bonuses (0.8)
Investment in increased apprentice headcount 0.6
--------
8.6
--------
GBP2.0m of this salary cost increase relates to both the
application of the new national minimum wage rates on 1 April 2022
to applicable colleagues and the increase in company NIC rate
(which is set to reverse in November). The investment in headcount
added costs of GBP2.0m and reflected key Group strategies around
centralisation of lead management, enhanced customer follow-up and
further investment in software development teams, digital marketing
expertise and cyber security.
Pay awards outside of the national minimum wage increases were
granted to colleagues following the Group-wide review in late 2021.
This led to an increase in the Period of GBP4.8m. Bonuses and
commissions reduced by GBP0.8m in the Period reflecting lower sales
volumes and the impact of new sales roles with higher basic pay but
lower commission payable. Finally, GBP0.6m was invested in
additional apprentices, under the Group's apprenticeship
programmes. The Group has recruited over 100 customer service
apprentices into the aftersales functions to create a pipeline of
future talent for the service advisor role.
Vehicle and valet costs rose due to the impact of National
Minimum Wage rises in valeting and increases in demonstration
fleets following their exceptional decline during the pandemic
period.
Energy costs in the Core Group were stable year on year despite
the increases seen in the wider wholesale markets. The Group
benefited from below market rate electricity costs under a fixed
contract which covered the majority of the Group's dealerships
until the end of September 2022. Any new build dealerships or
acquisitions post the contract being entered into back in September
2020 have been subject to higher variable rates. The Group remains
focused on reduced energy usage and successfully reduced
electricity usage on a like-for-like basis by 5% in the Period. An
energy purchasing strategy has been developed, which includes the
sourcing of off-grid energy solutions within the next 12 months to
manage the Group's exposure to energy market price volatility
risks. In addition, the Board has approved a GBP3m investment in
solar panels at 46 freehold dealerships which should generate 10%
of the Group's electricity load and the project is set to complete
by the end of September 2023 (subject to sourcing constraints).
The Group saw a GBP4.9m increase in other costs. This includes
the investment in core systems and infrastructure including
improved telephony systems and enhanced data security environments.
Other cost increases arose in areas such as travel and training as
the Group reverted to more normal behaviour patterns. Whilst many
of the Group's training courses are still delivered 'virtually',
physical training at Manufacturer locations, such as technical
training for vehicle technicians, has now returned to pre-pandemic
levels hence increasing costs.
Net Finance Charges
Net finance charges fell year on year as analysed below:
H1 FY23
Var to
H1 FY23 H1 FY22 H1 FY22
GBP'000 GBP'000 GBP'000
New vehicle Manufacturer stocking
interest 913 1,058 (145)
Interest on bank borrowings 802 848 (46)
Used vehicle stock funding interest 206 36 170
Interest on lease liabilities 1,645 1,762 (117)
Interest on bank deposits (356) (4) (352)
Net finance income relating to
defined benefit pension scheme (123) (62) (61)
-------- -------- ---------
Net Finance Charges 3,087 3,638 (551)
-------- -------- ---------
Interest income on bank deposits rose during the Period as a
result of the rise in interest rates generating higher levels of
income on the Group's significant cash reserves. Interest on bank
borrowings reduced despite the movement in interest rates due to
the impact of hedging and reductions in bank borrowings.
Interest on used vehicle stocking loans increased in the Period
as a result of the Group increasing the utilisation of such
facilities. There remained GBP137.6m of unencumbered used car stock
at 31 August 2022.
Pension Costs
The accounting surplus on the Group's closed defined benefit
pension scheme has decreased to GBP5.1m at 31 August 2022 (28
February 2022: GBP9.1m). A net actuarial loss of GBP3.0m was
recognised in the Statement of Comprehensive Income in the
Period.
Tax Payments
In the September 2022 Mini Budget, it was announced that the
increase in the rate of corporation tax in the UK to 25% would now
not occur and the rate will be held at 19%. As this change had not
been substantively enacted at 31 August 2022, the Group's deferred
tax balances continue to be measured at the full 25% rate. On
enactment of the retention of the 19% rate, the Group's deferred
tax obligations are anticipated to reduce by GBP3.4m.
The Group's underlying effective rate of tax for the Period was
19.8% (H1 FY22: 20.9%). The Group continues to be classified as
"low risk" by HMRC and takes a pro-active approach to minimising
tax liabilities whilst ensuring it pays the appropriate level of
tax to the UK Government.
Dividend
An interim dividend of 0.70p per share (H1 FY22: 0.65p) in
respect of FY23 will be paid on 20 January 2023. The ex-dividend
date will be 15 December 2022 and the associated record date 16
December 2022.
Cash Flows
Free cash flow of GBP23.2m (H1 FY22: GBP63.6m) was generated in
the Period with a broadly neutral movement in working capital
overall generating cash of GBP0.9m. This free cash flow included
cash outflows in respect of interest and taxation, principal
elements of lease repayments and sustaining capital expenditure,
each comprising GBP7.8m cash outflow in the period.
The Group spent GBP2.3m, net of cash acquired, on the
acquisition of Wiper Blades Limited on 1 July 2022 and a further
GBP7.5m acquiring the freehold and long leasehold interests in the
property from which the Group's Nissan, Renault, Skoda, Peugeot and
Motor Nation businesses operate in Derby.
During the Period, the Group completed its latest Share Buyback
Programme purchasing 10,477,450 shares for cancellation in the
Period, representing 2.9% of total issued share capital, for a
total of GBP5.9m. The Board believes that this is an appropriate
use of capital and will continue a programme of Buybacks as a
relevant element of returns to shareholders, alongside dividend
payments. The Board has agreed a further GBP3m buyback programme
being announced today. A further GBP2m was spent acquiring shares
in the Group's Employee Benefit Trust ("EBT") to be used for the
satisfaction of colleague share incentive programmes. GBP3.6m was
spent on dividends paid as a result of the final dividend in
respect of the year ended 28 February 2022.
Karen Anderson, CFO
For the six months ended 31 August 2022
Six months ended 31 Six months ended 31 Year ended 28 February
August 2022 August 2021 2022
Note Underlying Non-underlying Total Underlying Non-underlying Total Underlying Non- Total
items items items items items underlying
(note (note items
4) 4) (note
4)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 1,999,712 - 1,999,712 1,924,134 - 1,924,134 3,615,052 - 3,615,052
Cost of
sales (1,775,991) - (1,775,991) (1,701,013) - (1,701,013) (3,179,632) - (3,179,632)
----------- -------------- ----------- ----------- -------------- ----------- ----------- ---------- -----------
Gross
profit 223,721 - 223,721 223,121 - 223,121 435,420 - 435,420
Operating
expenses (192,417) (1,278) (193,695) (167,650) (731) (168,381) (347,753) (1,934) (349,687)
----------- -------------- ----------- ----------- -------------- ----------- ----------- ---------- -----------
Operating
profit 31,304 (1,278) 30,026 55,471 (731) 54,740 87,667 (1,934) 85,733
Finance
income 5 479 - 479 66 - 66 163 - 163
Finance
costs 5 (3,566) - (3,566) (3,704) - (3,704) (7,126) - (7,126)
----------- -------------- ----------- ----------- -------------- ----------- ----------- ---------- -----------
Profit
before
tax 28,217 (1,278) 26,939 51,833 (731) 51,102 80,704 (1,934) 78,770
Taxation 6 (5,598) 182 (5,416) (10,837) (2,760) (13,597) (16,062) (2,708) (18,770)
----------- -------------- ----------- ----------- -------------- ----------- ----------- ---------- -----------
Profit for
the period
attributed
to equity
holders 22,619 (1,096) 21,523 40,996 (3,491) 37,505 64,642 (4,642) 60,000
=========== ============== =========== =========== ============== =========== =========== ========== ===========
Basic
earnings
per share
(p) 7 6.19 10.36 16.64
Diluted
earnings
per share
(p) 7 5.85 9.95 15.96
----------- ----------- -----------
For the six months ended 31 August 2022
Six months Six months Year
ended ended ended
31 August 31 August 28 February
2022 2021 2022
Note GBP'000 GBP'000 GBP'000
Profit for the period 21,523 37,505 60,000
Other comprehensive (expense) /
income
Items that will not be reclassified
to profit or loss:
Actuarial (loss) / gain on retirement
benefit obligations 10 (4,048) 1,639 2,801
Deferred tax relating to actuarial
loss / (gain) on retirement benefit
obligations 1,012 (410) (700)
Items that may be reclassified subsequently
to profit or loss:
Cash flow hedges 185 149 503
Deferred tax relating to cash flow
hedges (35) (28) (96)
Other comprehensive (expense) /
income for the period, net of tax (2,886) 1,350 2,508
---------- ---------- ------------
Total comprehensive income for the
period attributable to equity holders 18,637 38,855 62,508
========== ========== ============
As at 31 August 2022
31 August 31 August 28 February
2022 2021 2022
Note GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill and other indefinite
life assets 12 105,077 99,444 103,470
Other intangible assets 2,397 2,019 1,797
Retirement benefit asset 10 5,073 7,906 9,055
Property, plant and equipment 261,712 246,920 254,133
Right of use assets 74,608 81,254 78,278
448,867 437,543 446,733
---------- ---------- ------------
Current assets
Inventories 496,739 392,491 475,027
Trade and other receivables 72,117 43,038 51,839
Derivative financial instruments 190 - -
Cash and cash equivalents 85,860 113,504 83,793
---------- ---------- ------------
654,906 549,033 610,659
Property assets held for sale - 995 -
---------- ----------
Total current assets 654,906 550,028 610,659
---------- ---------- ------------
Total assets 1,103,773 987,571 1,057,392
========== ========== ============
Current liabilities
Trade and other payables (569,717) (482,109) (529,086)
Current tax liabilities (3,039) (6,563) (3,734)
Derivative financial liabilities - - (13)
Contract liabilities (12,526) (12,639) (11,752)
Borrowings (12,954) (638) (12,283)
Lease liabilities (14,415) (13,920) (14,132)
---------- ---------- ------------
Total current liabilities (612,651) (515,869) (571,000)
---------- ---------- ------------
Non-current liabilities
Borrowings (55,063) (55,544) (55,343)
Lease liabilities (70,691) (77,461) (74,698)
Derivative financial instruments - (348) -
Deferred income tax liabilities (13,448) (13,063) (13,023)
Contract liabilities (11,897) (10,159) (11,447)
---------- ---------- ------------
Total non-current liabilities (151,099) (156,575) (154,511)
---------- ---------- ------------
Total liabilities (763,750) (672,444) (725,511)
---------- ---------- ------------
Net assets 340,023 315,127 331,881
========== ========== ============
Capital and reserves attributable
to equity holders of the Group
Ordinary share capital 34,894 36,859 35,942
Share premium 124,939 124,939 124,939
Other reserve 10,645 10,645 10,645
Hedging reserve 154 (282) 4
Treasury share reserve (3,134) (2,584) (1,586)
Capital redemption reserve 4,833 2,868 3,785
Retained earnings 167,692 142,682 158,152
---------- ---------- ------------
Total equity 340,023 315,127 331,881
========== ========== ============
For the six months ended 31 August 2022
Six months Six months Year
ended ended ended
31 August 31 August 28 February
2022 2021 2022
Note GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Operating profit 30,026 54,740 85,733
Loss/(profit) on sale of property,
plant and equipment 6 (64) (9)
Profit on lease modification (2) (157) (269)
Amortisation of intangible assets 214 202 407
Depreciation of property, plant
and equipment 6,900 6,493 14,365
Depreciation of right of use assets 7,775 7,946 16,658
Impairment charges - - 131
Movement in working capital 11 904 15,842 (27,973)
Share based payments charge 857 455 1,061
----------- ----------- -------------
Cash inflow from operations 46,680 85,457 90,104
Tax received - 128 135
Tax paid (4,801) (5,289) (14,479)
Finance income received 356 4 39
Finance costs paid (3,394) (3,443) (6,798)
Net cash inflow from operating
activities 38,841 76,857 69,001
----------- ----------- -------------
Cash flows from investing activities
Acquisition of businesses, net
of cash, overdrafts and borrowings
acquired (2,626) (1,567) (9,508)
Acquisition of freehold and long leasehold (7,468) - -
land and buildings
Purchases of intangible assets (1) (20) (44)
Purchases of other property, plant
and equipment (7,835) (5,907) (16,571)
Proceeds from disposal of property,
plant and equipment - 464 1,605
----------- ----------- -------------
Net cash outflow from investing
activities (17,930) (7,030) (24,518)
----------- ----------- -------------
Cash flows from financing activities
Proceeds from borrowings 8 671 - 5,699
Repayment of borrowings 8 (319) (16,267) (10,638)
Principal elements of lease repayments (7,827) (7,798) (15,786)
Sale of treasury shares 304 18 951
Purchase of treasury shares (2,000) - -
Cash settled share options (169) - (403)
Repurchase of own shares (5,898) (104) (6,014)
Dividends paid to equity holders (3,606) - (2,327)
Net cash outflow from financing
activities (18,844) (24,151) (28,518)
----------- ----------- -------------
Net increase in cash and cash
equivalents 8 2,067 45,676 15,965
Cash and cash equivalents at beginning
of period 83,793 67,828 67,828
----------- ----------- -------------
Cash and cash equivalents at
end of period 85,860 113,504 83,793
=========== =========== =============
For the six months ended 31 August 2022
Treasury Capital
Ordinary Share Other Hedging share redemption Retained Total
share capital premium reserve reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 March 2022 35,942 124,939 10,645 4 (1,586) 3,785 158,152 331,881
Profit for the period - - - - - - 21,523 21,523
Actuarial losses
on retirement benefit
obligations - - - - - - (4,048) (4,048)
Tax on items taken
directly to equity - - - (35) - - 1,012 977
Fair value gains - - - 185 - - - 185
-------- ---------- ---------- ---------- --------- ------------ ----------- ---------
Total comprehensive
income for the period - - - 150 - - 18,487 18,637
-------- ---------- ---------- ---------- --------- ------------ ----------- ---------
Sale of treasury
shares - - - - 452 - (131) 321
Purchase of treasury
shares - - - - (2,000) - - (2,000)
Cancellation of
repurchased shares (1,048) - - - - 1,048 - -
Repurchase of own
shares - - - - - - (5,898) (5,898)
Dividends paid - - - - - - (3,606) (3,606)
Share based payments
charge - - - - - - 688 688
----------
As at 31 August
2022 34,894 124,939 10,645 154 (3,134) 4,833 167,692 340,023
======== ========== ========== ========== ========= ============ =========== =========
The repurchase of own shares in the period was made pursuant to
the share buyback programmes announced on 2 March and 7 June
2022.
10,477,450 ordinary shares to the value of GBP5,898,000 had been
repurchased in the six months ended 31 August 2022. These shares
were cancelled immediately and accordingly, the nominal value of
these shares has been transferred to the capital redemption
reserve.
The 'Other reserve' is a merger reserve, arising from shares
issued as consideration to the former shareholders of acquired
companies.
For the six months ended 31 August 2021
Treasury Capital
Ordinary Share Other Hedging share redemption Retained Total
share capital premium reserve reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 March 2021 36,917 124,939 10,645 (403) (2,791) 2,810 103,823 275,940
Profit for the period - - - - - - 37,505 37,505
Actuarial losses
on retirement benefit
obligations - - - - - - 1,639 1,639
Tax on items taken
directly to equity - - - (28) - - (410) (438)
Fair value losses - - - 149 - - - 149
-------- ---------- ---------- ---------- --------- ------------ ----------- ---------
Total comprehensive
income for the period - - - 121 - - 38,734 38,855
-------- ---------- ---------- ---------- --------- ------------ ----------- ---------
Sale of treasury
shares - - - - 27 - (9) 18
Issuance of treasury
shares - - - - 180 - (15) 165
Cancellation of
repurchased shares (58) - - - - 58 - -
Repurchase of own
shares - - - - - - (306) (306)
Share based payments
charge - - - - - - 455 455
----------
As at 31 August
2021 36,859 124,939 10,645 (282) (2,584) 2,868 142,682 315,127
======== ========== ========== ========== ========= ============ =========== =========
For the year ended 28 February 2022
Ordinary Treasury Capital
share Share Other Hedging share redemption Retained Total
capital premium reserve reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 March 2021 36,917 124,939 10,645 (403) (2,791) 2,810 103,823 275,940
Profit for the year - - - - - - 60,000 60,000
Actuarial losses on
retirement benefit
obligations - - - - - - 2,801 2,801
Tax on items taken
directly to equity - - - (96) - - (700) (796)
Fair value gains - - - 503 - - - 503
-------- -------- -------- -------- -------- ----------- --------- -------
Total comprehensive
income for the year - - - 407 - - 62,101 62,508
-------- -------- -------- -------- -------- ----------- --------- -------
Sale of treasury shares - - - - 1,025 - (74) 951
Issuance of treasury
shares - - - - 180 - (15) 165
Repurchase of own
shares - - - - - - (6,014) (6,014)
Cancellation of repurchased
shares (975) - - - - 975 - -
Dividends paid - - - - - - (2,327) (2,327)
Share based payments
charge - - - - - - 658 658
-------- -------- -------- -------- -------- ----------- --------- -------
As at 28 February
2022 35,942 124,939 10,645 4 (1,586) 3,785 158,152 331,881
======== ======== ======== ======== ======== =========== ========= =======
NOTES
For the six months ended 31 August 2022
1. Basis of preparation
Vertu Motors plc is a Public Limited Company which is quoted on
the AiM Market and is incorporated and domiciled in the United
Kingdom. The address of the registered office is Vertu House, Fifth
Avenue Business Park, Team Valley, Gateshead, Tyne and Wear, NE11
0XA. The registered number of the Company is 05984855.
The financial information for the period ended 31 August 2022
and similarly the period ended 31 August 2021 has neither been
audited nor reviewed by the auditors. The financial information for
the year ended 28 February 2022 has been based on information
contained in the audited financial statements for that year.
The information for the year ended 28 February 2022 does not
constitute statutory accounts as defined in section 434 of the
Companies Act 2006. A copy of the statutory accounts for that year
has been delivered to the Registrar of Companies. The Auditors'
Report on those accounts was not qualified under section 498 of the
Companies Act 2006.
2. Accounting policies
In line with International Accounting Standard 34 and the
Disclosure and Transparency Rules of the Financial Conduct
Authority, these condensed interim financial statements have been
prepared applying the accounting policies and presentation that
were applied in the preparation of the Company's published
consolidated financial statements for the year ended 28 February
2022.
3. Segmental information
The Group adopts IFRS 8 "Operating Segments", which determines
and presents operating segments based on information provided to
the Group's Chief Operating Decision Maker ("CODM"), Robert
Forrester, Chief Executive Officer. The CODM receives information
about the Group overall and therefore there is one operating
segment.
The CODM assesses the performance of the operating segment based
on a measure of both revenue and gross margin. However, to increase
transparency, the Group has included below an additional voluntary
disclosure analysing revenue and gross margin within the reportable
segment .
Six months ended 31 Gross Gross Gross
August 2022 Revenue Revenue Profit Profit Margin
GBP'm Mix % GBP'm Mix % %
Aftersales(9) 158.9 8.0 89.0 39.8 45.4
Used cars 854.5 42.7 67.1 30.0 7.9
New car retail and
Motability 557.6 27.9 47.4 21.2 8.5
New fleet & commercial 428.7 21.4 20.2 9.0 4.7
-------- -------- -------- -------- --------
Total 1,999.7 100.0 223.7 100.0 11.2
======== ======== ======== ======== ========
Six months ended 31 Gross Gross Gross
August 2021 Revenue Revenue Profit Profit Margin
GBP'm Mix % GBP'm Mix % %
Aftersales(9) 143.4 7.5 83.1 37.3 47.5
Used cars 804.8 41.8 82.4 36.9 10.2
New car retail and
Motability 530.7 27.6 38.8 17.4 7.3
New fleet & commercial 445.2 23.1 18.8 8.4 4.2
-------- -------- -------- -------- --------
Total 1,924.1 100.0 223.1 100.0 11.6
======== ======== ======== ======== ========
Year ended 28 February Gross Gross Gross
2022 Revenue Revenue Profit Profit Margin
GBP'm Mix % GBP'm Mix % %
Aftersales(9) 288.8 8.0 164.9 37.9 47.1
Used cars 1,584.4 43.8 154.4 35.5 9.7
New car retail and
Motability 969.9 26.8 80.6 18.5 8.3
New fleet & commercial 772.0 21.4 35.5 8.1 4.6
-------- -------- -------- -------- --------
Total 3,615.1 100.0 435.4 100.0 12.0
======== ======== ======== ======== ========
(9) Aftersales margin expressed on
internal and external turnover
4. Non-underlying items
Six months Six months Year
ended ended ended
31 August 31 August 28 February
2022 2021 2022
GBP'000 GBP'000 GBP'000
Impairment charges - - (131)
Share based payment charge (1,064) (529) (1,396)
Amortisation (214) (202) (407)
----------- ----------- -------------
Non-underlying loss before tax (1,278) (731) (1,934)
Non-underlying taxation charge 182 (2,760) (2,708)
----------- ----------- -------------
Non-underlying loss after tax (1,096) (3,491) (4,642)
=========== =========== =============
5. Finance income and costs
Six months Six months Year
ended ended ended
31 August 31 August 28 February
2022 2021 2022
GBP'000 GBP'000 GBP'000
Interest on short-term bank deposits 356 4 39
Net finance income relating to
Group pension scheme 123 62 124
----------- ----------- -------------
Finance income 479 66 163
=========== =========== =============
Bank loans and overdrafts (802) (848) (1,701)
Vehicle stocking interest (1,119) (1,094) (1,844)
Lease liability interest (1,645) (1,762) (3,581)
----------- ----------- -------------
Finance costs (3,566) (3,704) (7,126)
=========== =========== =============
6. Taxation
In the September 2022 Mini Budget, it was announced that the
increase in the rate of corporation tax in the UK to 25% would now
not occur and the rate will be held at 19%. As this change had not
been substantively enacted at 31 August 2022, the Group's deferred
tax balances continue to be measured at the full 25% rate. On
enactment of the retention of the 19% rate, the Group's deferred
tax obligations are anticipated to reduce by GBP3.4m.
The Group's underlying effective rate of tax for the Period was
19.8% (H1 FY22: 20.9%). The Group continues to be classified as
"low risk" by HMRC and takes a pro-active approach to minimising
tax liabilities whilst ensuring it pays the appropriate level of
tax to the UK Government.
7. Earnings per share
Basic and diluted earnings per share are calculated by dividing
the earnings attributable to equity shareholders by the weighted
average number of ordinary shares during the period or the diluted
weighted average number of ordinary shares in issue in the
period.
The Group only has one category of potentially dilutive ordinary
shares, which are share options. A calculation has been undertaken
to determine the number of shares that could have been acquired at
fair value (determined as the average annual market price of the
Group's shares) based on the monetary value of the subscription
rights attached to the outstanding share options. The number of
shares calculated as above is compared with the number of shares
that would have been issued assuming the exercise of the share
options.
7. Earnings per share (continued)
Adjusted earnings per share is calculated by dividing the
adjusted earnings attributable to equity shareholders by the
weighted average number of ordinary shares in issue during the
period.
Six months Six months Year
ended ended ended
31 August 31 August 28 February
2022 2021 2022
GBP'000 GBP'000 GBP'000
Profit attributable to equity shareholders 21,523 37,505 60,000
Non-underlying items (note 4) 1,096 3,491 4,642
Adjusted earnings attributable to
equity shareholders 22,619 40,996 64,642
=========== =========== =============
Weighted average number of shares
in issue ('000s) 347,939 362,165 360,651
Potentially dilutive shares ('000s) 20,072 14,890 15,222
----------- ----------- -------------
Diluted weighted average number
of shares in issue ('000s) 368,011 377,055 375,873
=========== =========== =============
Basic earnings per share 6.19p 10.36p 16.64p
=========== =========== =============
Diluted earnings per share 5.85p 9.95p 15.96p
=========== =========== =============
Underlying earnings per share 6.50p 11.32p 17.92p
=========== =========== =============
Diluted underlying earnings per
share 6.15p 10.87p 17.20p
=========== =========== =============
At 31 August 2022, there were 348,945,522 shares in issue
(including 6,922,122 held by the Group's employee benefit
trust).
8. Reconciliation of net cash flow to movement in net cash
31 August 31 August 28 February
2022 2021 2022
GBP'000 GBP'000 GBP'000
Net increase in cash and cash equivalents 2,067 45,676 15,965
Cash inflow from proceeds of borrowings (671) - (5,699)
Cash outflow from repayment of borrowings 319 16,267 10,638
Cash movement in net cash 1,715 61,943 20,904
Capitalisation of loan arrangement - - -
fees
Amortisation of loan arrangement
fees (39) (90) (206)
---------- ---------- ------------
Non-cash movement in net cash (39) (90) (206)
Movement in net cash (excluding
lease liabilities) 1,676 61,853 20,698
Opening net cash/(debt) (excluding
lease liabilities) 16,167 (4,531) (4,531)
---------- ---------- ------------
Closing net cash (excluding lease
liabilities) 17,843 57,322 16,167
Opening lease liabilities (88,830) (91,101) (91,101)
Capitalisation of new leases (4,196) (8,245) (14,132)
Disposal of lease liabilities 93 167 617
Interest element of lease repayments (1,645) (1,762) (3,581)
Cash outflow from lease repayments 9,472 9,560 19,367
---------- ---------- ------------
Closing lease liabilities (85,106) (91,381) (88,830)
Closing net debt (including lease
liabilities) (67,263) (34,059) (72,663)
========== ========== ============
9. Acquisitions
On 1 July 2022, the Group acquired the entire issued share
capital of Wiper Blades Limited, an online retailer. Total
consideration of GBP3,445,000 was settled from the Group's cash
resources.
10. Retirement benefit asset
The Group operates a trust based defined benefit pension scheme,
"Bristol Street Pension Scheme", which has three defined benefit
sections which were closed to new entrants and future accrual on 31
May 2003, with another section closed to new entrants in July 2003
and future accrual in October 2013. The Group has applied IAS 19
(revised) to the scheme.
During the six month period ended 31 August 2022, there have
been changes in the financial and demographic assumptions
underlying the calculation of the liabilities. In particular, the
discount rate has increased due to the rise in corporate bond
yields. The effect of these changes in assumptions was a decrease
in liabilities of GBP8,228,000. The hedging strategy in place
within the scheme investment portfolio meant that the Period also
saw a decline in the market value of scheme assets of
GBP12,210,000, offsetting the decrease in liabilities. In total, an
actuarial loss of GBP4,048,000 was recognised in the Consolidated
Statement of Comprehensive Income.
11. Cash flow from movement in working capital
The following table reconciles the movement in balance sheet
headings to the movement in working capital as presented in the
Consolidated Cash Flow Statement.
For the six months ended
31 August 2022
Trade and Trade Total working
other receivables and other capital
Inventories GBP'000 payables movement
GBP'000 GBP'000 GBP'000
Trade and other payables (569,717)
Contract liabilities (24,423)
-----------
At 31 August 2022 496,739 72,117 (594,140)
At 28 February 2022 475,027 51,839 (552,285)
Balance sheet movement (21,712) (20,278) 41,855
Acquisitions 123 16 156
-------------- ------------------- -----------
Movement excluding business
combinations (21,589) (20,262) 42,011 160
============== =================== ===========
Pension related balances 57
Decrease in capital creditor 823
Increase in interest accrual (136)
Movement in working capital 904
==============
11. Cash flow from movement in working capital (continued)
For the six months ended
31 August 2021
Trade Trade Total working
and other and other capital movement
Inventories receivables payables GBP'000
GBP'000 GBP'000 GBP'000
Trade and other payables (482,109)
Contract liabilities (22,798)
-----------
At 31 August 2021 392,491 43,038 (504,907)
At 28 February 2021 597,391 59,375 (710,515)
Balance sheet movement 204,900 16,337 (205,608)
Acquisitions 686 347 (8)
-------------- ------------- -----------
Movement excluding business
combinations 205,586 16,684 (205,616) 16,654
============== ============= ===========
Pension related balances 41
Increase in capital creditor (643)
Increase in interest accrual (172)
Increase in share buyback
accrual (202)
Bonus accrual settled in
shares 164
------------------
Movement in working capital 15,842
==================
For the year ended 28 February
2022
Trade Trade Total working
and other and other capital movement
Inventories receivables payables GBP'000
GBP'000 GBP'000 GBP'000
Trade and other payables (529,086)
Contract liabilities (23,199)
-----------
At 28 February 2022 475,027 51,839 (552,285)
At 28 February 2021 597,391 59,375 (710,515)
-------------- ------------- -----------
Balance sheet movement 122,364 7,536 (158,230)
Acquisitions 5,175 1,469 (6,181)
Movement excluding business
combinations 127,539 9,005 (164,411) (27,867)
============== ============= ===========
Pension related balances 116
Increase in capital creditor (286)
Increase in interest accrual (100)
Bonus accrual settled in
shares 164
------------------
Movement in working capital (27,973)
==================
12. Goodwill and other indefinite life assets
31 August 31 August 28 February
2022 2021 2022
GBP'000 GBP'000 GBP'000
Goodwill 76,182 71,862 74,575
Other indefinite life assets - Franchise
relationships 28,895 27,582 28,895
At end of period 105,077 99,444 103,470
========== ========== ============
13. Risks and uncertainties
There are certain risk factors which could result in the actual
results of the Group differing materially from expected results.
These factors include: failure to deliver on the strategic goal of
the Group to acquire and consolidate UK motor retail businesses,
failure to meet competitive challenges to our business model or
sector, advances in vehicle technology providing customers with
mobility solutions which bypass the dealer network, inability to
maintain current high quality relationships with Manufacturer
partners, economic conditions impacting trading, market driven
fluctuations in used vehicle values, litigation and regulatory
risk, failure to comply with health and safety policy, failure to
attract, develop and retain talent, failure of Group information
and telecommunication systems, malicious cyber-attack, availability
of credit and vehicle financing, use of estimates and currency
risk.
All of the above principal risks are consistent with those
detailed in the Annual Report for the year ended 28 February
2022.
The Board continually review the risk factors which could impact
on the Group achieving its expected results and confirm that the
above principal factors will remain relevant for the final six
months of the financial year ending 28 February 2023.
Set out below are the definitions and sources of various
alternative performance measures which are referred to throughout
the Interim Financial Report. All financial information provided is
in respect of the Vertu Motors plc Group.
Definitions
Like-for-like Dealerships that have comparable trading periods
in two consecutive financial years, only the comparable period is
measured as "Like-for-like".
H1 FY23 The six month period ended 31 August 2022
H1 FY22 The six month period ended 31 August 2021
Adjusted Adjusted for amortisation of intangible assets and
share based payment charges as these are unconnected with the
ordinary business of the Group.
Aftersales gross margin Aftersales gross margin compares the
gross profit earned from aftersales activities to total aftersales
revenues, including internal revenue relating to service and
vehicle preparation work performed on the Group's own vehicles.
This is to properly reflect the real activity of the Group's
aftersales departments.
Alternative Performance Measures
Adjusted Profit Before Tax (PBT) Six months Six months
ended ended
31 August 31 August
2022 2021
GBP'000 GBP'000
Profit before tax 26,939 51,102
Amortisation 214 202
Share based payment charge 1,064 529
Adjusted PBT 28,217 51,833
=========== ===========
Tangible net assets per share 31 August 28 February
2022 2022
GBP'000 GBP'000
Net assets 340,023 331,881
Less:
Goodwill and other indefinite life
assets (105,077) (103,470)
Other intangible assets (2,397) (1,797)
Add:
Deferred tax on above adjustments 11,100 10,856
---------- ------------
Tangible net assets 243,649 237,470
========== ============
Tangible net assets per share (p) 71.2p 66.8p
========== ============
At 31 August 2022, there were 348,945,522 shares in issue (28
February 2022: 359,422,972), of which 6,922,122 were held by the
Group's employee benefit trust (28 February 2022: 4,141,272).
Rights to dividends on shares held in the Group's employee benefit
trust have been waived and therefore such shares are not included
in the tangible net asset per share calculation.
Free Cash Flow
Six months Six months
ended ended
31 August 31 August
2022 2021
GBP'000 GBP'000
Net cash inflow from operating activities 38,841 76,857
Purchase of other property, plant
and equipment (7,835) (5,907)
Purchase of intangible assets (1) (20)
Proceeds from disposal of property,
plant and equipment - 464
Principal elements of lease repayments (7,827) (7,798)
----------- -----------
Free cash flow 23,178 63,596
=========== ===========
Like-for-like reconciliations:
Revenue by department
H1 FY23 H1 FY23
Group revenue Acquisitions Disposals Like-for-like
GBP'm revenue revenue revenue
GBP'm GBP'm GBP'm
New car retail and
Motability 557.6 (12.3) - 545.3
New fleet and commercial 428.7 (5.6) - 423.1
Used cars 854.5 (21.9) - 832.6
Aftersales 158.9 (4.8) - 154.1
--------------- --------------- ------------ ---------------
Total revenue 1,999.7 (44.6) - 1,955.1
=============== =============== ============ ===============
H1 FY22 H1 FY22
Group revenue Acquisitions Disposals Like-for-like
GBP'm revenue revenue revenue
GBP'm GBP'm GBP'm
New car retail and
Motability 530.7 (0.4) (2.5) 527.8
New fleet and commercial 445.2 (0.2) - 445.0
Used cars 804.8 (0.9) (9.2) 794.7
Aftersales 143.4 (0.2) (0.9) 142.3
--------------- --------------- ------------ ---------------
Total revenue 1,924.1 (1.7) (12.6) 1,909.8
=============== =============== ============ ===============
Aftersales revenue by department
H1 FY23 H1 FY23
Group revenue Acquisitions Disposals Like-for-like
GBP'm revenue revenue revenue
GBP'm GBP'm GBP'm
Parts 96.7 (3.4) - 93.3
Accident repair 10.2 (0.2) (0.1) 9.9
--------------- --------------- ------------ ---------------
Parts and accident
repair 106.9 (3.6) (0.1) 103.2
Forecourt 6.7 - - 6.7
Service 82.3 (1.9) - 80.4
--------------- --------------- ------------ ---------------
Total revenue (10) 195.9 (5.5) (0.1) 190.3
=============== =============== ============ ===============
(10) Inclusive of both internal and external revenue
Like-for-like reconciliations (continued):
Aftersales revenue by department (continued)
H1 FY22 H1 FY22
Group revenue Acquisitions Disposals Like-for-like
GBP'm revenue revenue revenue
GBP'm GBP'm GBP'm
Parts 86.3 (0.2) (0.3) 85.8
Accident repair 8.0 - (0.4) 7.6
--------------- --------------- ------------ ---------------
Parts and accident
repair 94.3 (0.2) (0.7) 93.4
Forecourt 3.5 - - 3.5
Service 77.2 (0.1) (0.3) 76.8
--------------- --------------- ------------ ---------------
Total revenue (10) 175.0 (0.3) (1.0) 173.7
=============== =============== ============ ===============
(10) Inclusive of both internal and external revenue
Gross profit by department
H1 FY23 H1 FY23
Group gross Acquisitions Disposals Like-for-like
profit gross profit gross profit gross profit
GBP'm GBP'm GBP'm GBP'm
New car retail and
Motability 47.4 (1.1) - 46.3
New fleet and commercial 20.2 (0.4) - 19.8
Used cars 67.1 (1.2) - 65.9
Aftersales 89.0 (2.2) - 86.8
------------- --------------- --------------- ---------------
Total gross profit 223.7 (4.9) - 218.8
============= =============== =============== ===============
H1 FY22 H1 FY22
Group gross Acquisitions Disposals Like-for-like
profit gross profit gross profit gross profit
GBP'm GBP'm GBP'm GBP'm
New car retail and
Motability 38.8 - (0.2) 38.6
New fleet and commercial 18.8 - - 18.8
Used cars 82.4 (0.1) (0.6) 81.7
Aftersales 83.1 (0.1) (0.6) 82.4
------------- --------------- --------------- ---------------
Total gross profit 223.1 (0.2) (1.4) 221.5
============= =============== =============== ===============
Like-for-like reconciliations (continued):
Aftersales gross profit by department
H1 FY23 H1 FY23
Group gross Acquisitions Disposals Like-for-like
profit gross profit gross profit gross profit
GBP'm GBP'm GBP'm GBP'm
Parts 21.7 (0.7) - 21.0
Accident repair 5.4 (0.2) - 5.2
------------- --------------- --------------- ---------------
Parts and accident
repair 27.1 (0.9) - 26.2
Forecourt 0.4 - - 0.4
Service 61.5 (1.3) - 60.2
------------- --------------- --------------- ---------------
Total gross profit 89.0 (2.2) - 86.8
============= =============== =============== ===============
H1 FY22 H1 FY22
Group gross Acquisitions Disposals Like-for-like
profit gross profit gross profit gross profit
GBP'm GBP'm GBP'm GBP'm
Parts 19.0 - - 19.0
Accident repair 4.5 - (0.4) 4.1
------------- --------------- --------------- ---------------
Parts and accident
repair 23.5 - (0.4) 23.1
Forecourt 0.3 - - 0.3
Service 59.3 (0.1) (0.2) 59.0
------------- --------------- --------------- ---------------
Total gross profit 83.1 (0.1) (0.6) 82.4
============= =============== =============== ===============
Number of units sold by department
H1 FY23 H1 FY23
Total Group Acquisitions Disposals Core Group
New car retail 17,673 (661) - 17,012
New car Motability 4,711 (66) - 4,645
New fleet 11,522 (339) - 11,183
New commercial 8,707 (267) - 8,440
Used cars 43,022 (1,307) - 41,715
------------- --------------- ------------ ------------
Total units 85,635 (2,640) - 82,995
============= =============== ============ ============
H1 FY22 H1 FY22
Total Group Acquisitions Disposals Core Group
New car retail 18,086 (46) (84) 17,956
New car Motability 4,865 - (35) 4,830
New fleet 11,695 - (33) 11,662
New commercial 9,915 (11) - 9,904
Used cars 49,697 (71) (552) 49,074
------------- --------------- ------------ ------------
Total units 94,258 (128) (704) 93,426
============= =============== ============ ============
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