Vertu Motors Plc (LON:VTU) , the car retailer behind the Bristol Street and Motor Nation brands, drove revenues up by 7.6% to £818.9m in the year to February, with better margins helping pre-tax profits soar to £4.6m from a breakeven point last year. Vertu said it was now well positioned for growth in difficult market conditions and was planning to pay a maiden dividend for 2010/11.

Among the highlights, the group saw a 36% increase in the size of its dealer network as sales outlets operated by the group increased from 44 to 60. Total new retail volumes increased by 10.8% ( 1.1% on a like-for-like basis), with new retail car margins rising to 8.5% from 8.3%, reflecting consistent success in achieving manufacturer targets. Used car margins increased significantly from 10.4% to 12.5% reflecting rising used car values.

Overall, Vertu noted that the current year trading performance in March had been ahead of management expectations, with new car retail volumes up 16.1%, resulting in strong margins. Likewise, the company reported robust sales and margins in its used car operations

Robert Forrester, Vertu’s chief executive, said: “2009/10 proved to be a much stronger trading period than anticipated due to the twin supports of the Government's scrappage programme and the strengthening of used car values. Current trading has been robust. Although the economic and political uncertainty in the United Kingdom poses challenges, the board believe the group is well positioned to continue to build a sustainable, scalable business that delivers further shareholder value, reflected in the fact that we have announced today that we intend to pay a maiden dividend in this current financial year.”

Last June, Vertu raised £30m in a share placing proved at 30p in order to fund the expansion of its sales network. Today, the company’s shares were trading up 2.7% at 37p.

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