REG - Vertu Motors PLC - Acquisition of Burrows Motor Company Limited

Vertu MotorsAnnouncement

29/10/2024 07:15

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RNS Number : 0165K  Vertu Motors PLC  29 October 2024

29 October 2024

Vertu Motors plc ("Vertu Motors" or "Company")

Acquisition of Burrows Motor Company Limited

Vertu acquires 9 dealerships expanding relationship with Toyota, Mazda and Kia

Vertu Motors, the UK Automotive retailer with a network of 202 sales and
aftersales outlets across the UK, is pleased to announce that on 29 October
2024 it has acquired the entire issued share capital of Burrows Motor Company
Limited ("Burrows").

·      Expansion of Group's scale, reflecting ongoing execution of Group
strategy

·      Well invested, freehold rich property portfolio

·      Acquisition funded by existing cash and borrowing facilities with
gearing remaining significantly below target level

·      Transaction is expected to deliver returns in excess of cost of
capital and be earnings enhancing in first full year of ownership

·      Expansion of manufacturer relationships: Toyota grows from 6 to
11 outlets, Mazda from 2 to 4 outlets and Kia from 3 to 4 outlets

Burrows is a family-owned group of dealerships operating five Toyota
dealerships, two Mazda dealerships and one Kia dealership. The acquisition
significantly increases Vertu brand presence in Yorkshire and Nottinghamshire
adding outlets in Barnsley (2), Doncaster, Rotherham, Sheffield (3), York and
Worksop.  All outlets will be rebranded Vertu in line with our recently
announced Brand strategy and integrated into the Vertu systems platform in the
coming weeks.

For the year ended 31 December 2023, Burrows Motor Company Limited achieved
revenue of £168.9m and an operating profit of £1.4m. Consideration, net of
cash acquired, is estimated at £12.5m, subject to finalisation of completion
accounts, with £1.0m of the consideration deferred for 12 months. The
consideration includes £17.6m in respect of freehold properties and a payment
in respect of goodwill of £4.0m. Consideration for the acquisition will be
funded from the Group's existing borrowing facility and cash resources. In
addition, the Group has taken on Burrows' indebtedness of approximately
£10.5m which comprises freehold property backed mortgage funding provided by
a Manufacturer and used car stocking loans. The transaction is in line with
the Group's investment hurdle metrics and capital allocation policy to ensure
shareholder value is created.

Due to the seasonality of vehicle sales, the Business is expected to
contribute a loss for the remaining four months of the financial year to 28
February 2025 and is expected to be earnings enhancing in its first full year
of ownership.

Robert Forrester, CEO of Vertu Motors, commented:

"We have long admired the Burrows business and are delighted to have completed
this acquisition creating further scale for the Group with key Manufacturer
Partners.  The acquisition of Burrows gives us considerable scale in our
partnership with Toyota and strengthens the Vertu brand in Yorkshire and
Nottinghamshire. This is in line with our strategy to actively pursue value
accretive growth opportunities to enhance our portfolio, applying strict
investment return metrics as well as returning cash to shareholders."

 

 

 Vertu Motors plc                          Tel: +44 (0) 191 491 2121
 Robert Forrester, CEO
 Karen Anderson, CFO

 Phil Clark, Investor Relations

 Stifel (Nominated Adviser and Broker)     Tel: +44 (0) 207 710 7688
 Matthew Blawat
 Nick Harland

 Camarco                                   Tel: +44 (0) 203 757 4980
 Billy Clegg
 Tom Huddart

 Notes to Editors
 Vertu Motors is the fourth largest automotive retailer in the UK with a
 network of 202 sales outlets across the UK. Its dealerships operate
 predominantly under the Bristol Street Motors, Vertu 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 198 franchised sales outlets and 4
 non-franchised sales operations from 154 locations across the UK.

 Vertu's Mission Statement is to "deliver an outstanding customer motoring
 experience through honesty and trust".

 Vertu Motors Group websites - https://investors.vertumotors.com
 (https://investors.vertumotors.com) / www.vertucareers.com
 (http://www.vertucareers.com)

Vertu brand websites - www.vertumotors.com (http://www.vertumotors.com) /
 www.bristolstreet.co.uk (http://www.bristolstreet.co.uk) / www.vertuhonda.com
 (http://www.vertuhonda.com) / www.vertutoyota.com (http://www.vertutoyota.com)
 / www.macklinmotors.co.uk (http://www.macklinmotors.co.uk) /
 www.vertumotorcycles.com (http://www.vertumotorcycles.com)

 

 

 

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