Vertu Motors PLC AGM Trading Update (6319W)
August 20 2020 - 2:00AM
UK Regulatory
TIDMVTU
RNS Number : 6319W
Vertu Motors PLC
20 August 2020
20 August 2020
Vertu Motors plc ("Vertu Motors" or "Company")
AGM Trading Update
Robert Forrester, CEO of Vertu Motors said:
"July trading continued the trends seen in June and was
significantly stronger than both what we envisaged and the Group's
original business plan for the month. A robust recovery in customer
demand for our vehicles and servicing has continued, aided by our
investments in omnichannel retailing. A very successful 0% finance
used vehicle sale event was executed in a majority of the Group's
English dealerships and this, together with strong used car
margins, aided the delivery of a record month for used car profits.
The Group's high margin aftersales operations also performed well,
delivering year on year growth in revenue, gross profit and margin.
I would like to thank colleagues for their continued enthusiasm and
commitment in delivering this great result whilst ensuring all our
sites have remained safe for both customers and colleagues."
July trading performance
-- The Board is pleased to announce that the Group delivered an
adjusted profit before tax of GBP7.4m in July. This result absorbed
restructuring costs totalling GBP0.7m in respect of the headcount
reductions announced previously, which have now been completed.
-- The July profit was significantly ahead of the prior year and
original business plan reflecting customer demand. The result also
included GBP1.3m in respect of monies received from the Job
Retention Grant. We expect the remaining furloughed colleagues to
be back to work by the end of August.
-- The Group incurred an adjusted loss before tax of GBP5.2m in
the March to June period and so has now made year to date an
adjusted profit before tax of GBP2.2m.
-- The Group continued to see robust retail sales demand in the
new and used car and van segments in July. Fleet volumes were more
subdued. The Group's like-for-like vehicle sales volumes in July
compared to last year and SMMT registration data were:
Like-for-like SMMT
year on
year volume
change
New Retail 18.1% 20.4%
Motability 37.9% 35.0%
Fleet Cars (including agency) (24.4%) 5.2%(*)
Commercial Vehicles 4.5% 7.1%
Used Cars 13.7%
*includes Motability registrations
-- The Group generated record levels of used vehicle gross
profit in the month with like-for-like volume growth of 13.7%. Used
vehicle margins remained above normal levels.
-- National retail new car registrations saw the first
meaningful year on year uplift for 17 months. July saw Group
like-for-like volumes of new retail cars up 18.1% and order take
for the crucial September month is currently running over 20% ahead
of last year.
-- The UK fleet market in July was subdued, particularly key
segments such as corporate contract hire and daily rental. The
market was boosted by activity in the significant Motability
segment reflecting pent up demand. Group Motability like-for-like
volumes in July were up 37.9% as a result.
-- Aftersales demand continued to be strong and is above normal
levels with July delivering an 11.2% year on year uplift in core
Group service gross profit.
Summary
The Group is in a significantly better position than anticipated
during the lockdown, both in terms of profitability and cash flow
generation. Consumer demand has been stronger than initially
anticipated and we took steps to ensure the Group maximised its
cash liquidity, despite the already strong balance sheet position.
Whilst much of management's time and energy was focused on
navigating the business through the immediate effects of the
pandemic, time was also invested in the improvement of its systems
and omnichannel retailing capability which have delivered benefits
already, with further efficiency enhancements expected.
The Board's ambition is to grow the scale of the Group's
franchised dealership operations centred around key manufacturer
partnerships and investment in the Group's four major retailing
brands, Bristol Street Motors, Farnell, Macklin Motors and Vertu
Motors. Several growth opportunities are currently being evaluated
in terms of acquisitions against investment criteria used to ensure
shareholder value is created and we would expect progress in our
ambitions in the months ahead.
The next update scheduled to be provided by the Group is the
interim results announcement on 7 October 2020. As previously
advised, we are not providing guidance relating to the outcome for
the full year due to continued uncertainty.
For further information please contact:
Vertu Motors plc Tel: 0191 491 2121
Robert Forrester, CEO
Karen Anderson, CFO
Zeus Capital Limited Tel: 020 3829 5000
Jamie Peel
Andrew Jones
Dominic King
Camarco Tel: 020 3757 4983
Billy Clegg
Tom Huddart
Notes to Editors
Vertu Motors is the fifth largest automotive retailer in the UK
with a network of 134 sales outlets across the UK. Its dealerships
operate predominantly under the Bristol Street Motors, Vertu,
Farnell and Macklin Motors brand names.
Vertu Motors was established in November 2006 with the strategy
to consolidate the UK motor retail sector. It is intended that the
Group will continue to acquire motor retail operations to grow a
scaled dealership group. The Group's acquisition strategy is
supplemented by a focused organic growth strategy to drive
operational efficiencies through its national dealership network.
The Group currently operates 131 franchised sales outlets and 3
non-franchised sales operations from 110 locations across the
UK.
Vertu's Mission Statement is to "deliver an outstanding customer
motoring experience through honesty and trust".
Vertu Motors Group websites - investors.vertumotors.com /
www.vertucareers.com
Vertu brand websites - www.vertumotors.com /
www.bristolstreet.co.uk / www.vertuhonda.com / www.vertutoyota.com
/ www.macklinmotors.co.uk / www.farnelllandrover.com /
www.farnelljaguar.com / www.vertuvolkswagen.com /
www.vertumercedes-benz.com
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END
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