REG - Vertu Motors PLC - AGM Trading Update

Vertu MotorsAnnouncement

28/06/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230628:nRSb1061Ea&default-theme=true

RNS Number : 1061E  Vertu Motors PLC  28 June 2023

28 June 2023

Vertu Motors plc ("Vertu Motors", "Group", "Company")

AGM Trading Update

Vertu Motors, a leading UK automotive retailer with a network of 189 sales and
aftersales outlets is pleased to announce the following update with regards to
the three-month period to 31 May 2023 (the "Period").  Aided by the Helston
acquisition, the Group has delivered a trading profit above prior year levels,
despite the continued inflationary-driven cost headwinds.  The Board
anticipates that full year results for FY24 will be in line with current
market expectations.

Highlights

·    New car retail and Motability like-for-like volume growth of 10.8%,
with particular strength in Motability volumes.

·    Like-for-like new vehicle margins have remained strong at 7.9% (8.0%
last year) despite higher Motability mix which is at a lower margin.

·    Fleet and commercial vehicle like-for-like volume growth of 1.0%,
with focus on profitable fleet sales channels.

·    Like-for-like fleet and commercial vehicle gross margin improved to
5.0% (4.3% last year).

·    Used vehicle like-for-like volumes declined 5.9%, reflecting on-going
supply constraints with the Group focusing on pricing disciplines.

·    Like-for-like gross profit per used unit sold was stable at £1,648
(£1,652 last year).  Gross margin was 7.8% (8.1% last year), reflecting
continued higher selling prices.

·    Services revenues increased 4% like-for-like compared to prior year.

·    Improved gross profit was delivered in all aftersales channels on a
like-for-like basis. As expected, gross margin declined due to higher
technician salary costs. Technician capacity remains a continued constraint on
revenue growth in service with new initiatives planned to address.

·    Group operating expenses as a percentage of revenue were slightly
higher than in FY23, reflecting the anticipated higher energy costs, pay
actions and investment in IT.

·    The Helston acquisition made in FY23 continues to perform in line
with expectations and remains on target to deliver on the planned
improvements.

Market Performance

In the New retail and Motability channel, like-for-like volumes grew 10.8%
with Group performance comparing favourably with the UK market that grew 8%
over the same period.  Further market share growth for the Group therefore
arose.

In April, the SMMT increased its full year forecast for UK new vehicle
registrations by 2% to 1.83 million, because of stronger than anticipated
fleet sales as the market normalises on the supply side. In the Period, UK
fleet & commercial vehicle registrations grew by 30.9% aided by improving
vehicle supply particularly into the rental segments.   Group volume growth
was behind the market since it is not a major supplier to the low margin
rental sectors, which saw significant growth in the UK.

The UK used vehicle market remains resilient, whilst continued stability of
used vehicle prices is exhibited.  The Group's average used vehicle selling
price per unit grew by 3.4% on a like-for-like basis to over £21,000
reflecting these market conditions.

Outlook

The Board remains optimistic for the future.  New vehicle supply continues to
improve whilst constraints in used vehicle supply in the UK are likely to
persist, helping to underpin used vehicle values and gross profit.  The
market outlook, however, remains unclear due to uncertainty of consumer demand
in the light of the impact of inflationary pressures and higher interest
rates.  Management is focused on operational excellence around cost,
conversion and customer experience and the delivery of the Group's strategic
objectives through enhanced performance coming from scale and technology.
The Board anticipates that full year results for FY24 will be in line with
current market expectations.

Robert Forrester, Chief Executive Officer of Vertu Motors, said:

"I am pleased to report that trading remains positive.  The entire, recently
enlarged, Vertu team has put in hard work and dedication once again, and I
would like to thank them all.  Used car pricing has remained firm and we have
gained market share in the new car market.  The performance of our high
margin aftersales business has remained strong.

The integration of Helston Garages is progressing well and is on track to
deliver the planned synergies.  We are excited about the opportunities our
enlarged portfolio will create for Vertu Motors."

For further information please contact:

 

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

 Phil Clark, Investor relations                         PClark@vertumotors.com

 Zeus (Nominated Adviser and Broker)     Tel: +44 (0) 203 829 5000
 Jamie Peel
 Andrew Jones
 Dominic King

 Camarco                                 Tel: +44 (0) 203 757 4983
 Billy Clegg
 Tom Huddart

 Notes to Editors
 Vertu Motors is the fourth largest automotive retailer in the UK with a
 network of 189 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 185 franchised sales outlets and 4
 non-franchised sales operations from 141 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.macklinmotors.co.uk (http://www.macklinmotors.co.uk) /
 www.vertumotorcyles.com (http://www.vertumotorcyles.com)

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTFLFFRRFIDFIV