Vertu teases results
September 1st, 2010 by Richard Aucock
VERTU says the first half of 2010 has seen an encouraging business performance with profit up.
The revelations in the report will make interesting reading for all those in the car dealer trade.
Vertu reports, overall, acquisitions are progressing, newly acquired businesses are performing well and ‘pre exceptional profit’ is marginally ahead of last year.
We can also expect more consolidation from Vertu, thanks to a net cash position and good freehold-backed balance sheet.
But how have things been on the showroom floor?
Private new car sales rose in the five months to July 2010 by 6.7 percent on a like for like basis, and by 35.2 percent overall as the number of sales outlets has increased over the last year.
Private registrations in the UK in the corresponding period rose 11.8 percent.
More recently, private new car sales have decreased year on year as the scrappage programme ended. Even so, Vertu reckons it will ‘significantly outperform the retail market’.
Why such confidence? ‘Scrappage sales were disproportionately concentrated in franchises in which the Group does not have strong representation.’
Fleet and commercial new vehicle sales volumes fell on a like for like basis by 7.1% in the five months to July 2010 due to Vertu undertaking lower volumes of low margin car fleet business.
There’s good news here, though; overall margins have improved year-on-year as a result. Even Vertu’s historically loss-making Iveco business continues to make good progress in achieving profitability in the short term.
Used cars have gone up 5.2 percent on a like for like basis – entirely because of the end of scrappage. Overall used volumes went up by 24.6 percent, reflecting acquisitions and increasing margin share.
Nothing out of the ordinary is expected to emerge from the first half performance, meaning the Vertu board expects performance to be in line with its expectations.
However, caution will remain at the forefront, because of the dodgy macro-economic outlook.
Fully confirmed half year results will be announced on 20 October 2010.