REG - Vertu Motors PLC - Interim Results
Wed 07:00
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RNS Number : 4593C Vertu Motors PLC 08 October 2025
8(th) October 2025
Vertu Motors plc ("Vertu", "Group")
Unaudited interim results for the six months ended 31 August 2025
Market share gains and tight cost control
Vertu Motors plc, the automotive retailer with a network of 191 sales and
aftersales outlets across the UK and a sector leading brand, announces its
interim results for the six months ended 31 August 2025 ("the Period").
FINANCIAL SUMMARY
H1 FY26 H1 FY25 FY25
Revenue £2,510.0m £2,474.6m £4,763.9m
Adjusted(1) profit before tax £20.0m £22.1m £29.3m
Basic Adjusted(1) EPS 4.57p 4.77p 6.58p
Dividends per share 0.90p 0.90p 2.05p
Free Cash Flow £0.4m (£14.3m) £37.3m
Net Debt(2) £78.3m £83.9m £66.6m
Commenting on the results, Robert Forrester, Chief Executive, said:
"The Group has performed well despite continued upheaval in the new car market
due to the Government's policy to electrify the UK car parc. We have
delivered market share gains in every area as the Group trades under the
single Vertu brand for the first time. We were particularly pleased to see
further growth in our BEV retail market share.
Our high-margin aftersales and used car channels delivered another good
performance.
It was disappointing for the industry to face major disruption across the JLR
network following a cyber-attack on the Manufacturer during the key
plate-change month of September. I was in awe of the way that our teams
reacted to the disruption on customers and to minimise the impact in our 10
JLR dealerships, with the full support of JLR which has responded admirably.
Whilst the situation is fluid, it appears to be easing in recent days. We
are currently working with our insurance brokers and insurers to assess a
potential claim under our insurance policy, which extends to the impact of
third-party systems outages.
The Group is very clear of its strategic priorities including further growth
in the number of sales outlets, significant control of costs and the continued
share buyback programme to drive shareholder value creation."
H1 Highlights
· Record H1 revenues, bolstered by the acquisition of the Burrows group
in October 2024.
· Group grew total market share in all new vehicle channels
(retail, fleet and commercial vehicles) to 4.5% (H1 FY25: 4.4%).
· Group like-for-like retail sales volumes of Battery Electric
Vehicles ("BEV") grew 82.4% compared to UK BEV retail sales growth of 55.2%,
representing major market share gains in the growing BEV segment -
affordability of BEV vehicles has improved markedly.
· The UK new car market remains subdued against a very low base,
facing continued pressure from the UK Government's Zero Emission Vehicle
("ZEV") mandate and general consumer environment. Pre-registration activity
appears elevated.
· Growth has been delivered in the Group's high margin aftersales
business due to improved pricing and benefits of initiatives to drive
retention and returns. Like-for-like gross profit up £4.0m.
· Like-for-like increase of £0.6m in used car gross profit
generation; good performance given supply constraints.
· Reduction in like-for-like gross profits of £4.4m and £1.2m
respectively in the new retail (including Motability) and fleet and commercial
channels on lower volumes. The Motability market showed anticipated
weakness.
· The Group continued its strong focus on cost control with
like-for-like operating expenses up just 0.3% on last year in the Period
despite significant inflationary pressures.
· Adjusted profit before tax for the Period of £20.0m (H1 2025:
£22.1m) was delivered. As expected, this was below the prior year,
reflecting the relative strength of comparative profits in H1 FY25.
· The Group continues to develop its portfolio of sales outlets
with the announcement of the opening of three new BYD sales outlets by 1
November, bringing the total number of BYD outlets operated by the Group to
five.
· Sale of three surplus properties for £3.3m cash proceeds, 10.7%
above book value.
· Tangible net assets per share of 76.1p (28 February 2025:
72.9p)
· 9.4m shares repurchased at a cost of £5.6m in the Period:
buyback continues with £7.0m of the current £12.0m authority expended to 30
September 2025. Since share buyback programmes began in July 2017, over £42m
has been returned to shareholders through the repurchase of shares, reducing
the Group's shares in issue by over 19%.
· Interim dividend maintained at 0.9p per share, payable in January
2026, reflecting the strength of the Group's balance sheet and Board
confidence in the Group's prospects.
CURRENT TRADING AND OUTLOOK
· Significant disruption to operations in the Group's 10 JLR
dealerships arose from 1 September 2025 due to a cyber-attack on the
Manufacturer. The Board currently anticipate the one-off impact on Group
adjusted profit before tax for FY26 is a reduction of up to £5.5m depending
on the timing of full restoration of JLR systems and normal trading.
September trading result was impacted by £2.0m due to the JLR disruption.
There has been a progressive easing of the disruption in recent days.
· The Group holds an insurance policy which includes business
interruption coverage for third-party system outages and is currently working
with its insurance brokers and insurers to assess a claim.
· Excluding this one-off impact of the JLR cyber-attack, the
underlying profit before tax of the Group for the full year is expected to be
in line with market expectations(3).
· September trading profit was ahead of the prior year, excluding
the JLR impact.
· The Group delivered growth of 1.8% in September like-for-like new
retail vehicle sales. The UK new retail market grew 8.9% augmented by
tactical pre-registration activity.
· Used vehicle sale volumes on a like-for-like basis were up
year-on-year in September by 5.8% with stable margins.
· Aftersales demand remained strong with gross profit growth
exhibited.
· Recent Government announcement of BEV grants, which benefit many
of the Group's franchises, expected to improve demand for new BEV cars in H2.
· Management to be strengthened with the creation from 1 January
2026 of two Managing Director roles to take responsibility for the Group's
dealership operations. These two roles have been filled with internal
promotions.
(1) Adjusted to remove non-underlying items (share-based payment charges and
amortisation have been included in underlying items and parts revenue on
vehicle preparation excluded from external revenues in both years).
(2) Excludes lease liabilities, includes used vehicle stocking loans.
(3) According to compiled data at 7 October 2025, the current consensus of
three sell side analysts' expectations for FY26. Adjusted profit before tax
is £27.2m with a range of £26.5m to £27.5m.
Webcast details
Vertu management will make a webcast available for analysts and investors this
morning on the Group's website https://investors.vertumotors.com/results/
(https://investors.vertumotors.com/results/)
For further information please contact:
Vertu Motors plc Tel: +44 (0) 191 491 2121
Robert Forrester, CEO
Karen Anderson, CFO
Phil Clark, Investor Relations
Stifel (Nominated Adviser and Joint Broker) Tel: +44 (0) 207 710 7688
Matthew Blawat
Callum Stewart
Shore Capital (Joint Broker) Tel: +44 (0) 20 (Tel:020) 7408 4090
Mark Percy / Sophie Collins (Corporate Advisory)
Isobel Jones (Corporate Broking)
Camarco Tel: +44 (0) 203 757 4980
Billy Clegg
Tom Huddart
Blackdown Partners (Joint Financial Advisor) Tel: +44 (0) 754 995 4255
Peter Tracey
Tom Fyson
Evercore (Joint Financial Advisor) Tel: +44 (0) 207 653 6000
Ed Banks
Dimitrious Georgiou
CHAIRMAN'S STATEMENT
The Group once again showed its adaptability and high levels of operational
excellence during the period ended 31 August 2025. The Group faced a
challenging new car market driven by continued pressure from the Zero Emission
Vehicle ("ZEV") Mandate and a weak general consumer environment and
macro-economic uncertainty. Adjusted(4) profit before tax of £20.0m was
below the levels achieved in the prior period largely due to the new car
market conditions.
On 31 August 2025, one of the Group's major Manufacturer partners, Jaguar Land
Rover (JLR), was impacted by global system outages, following a
cyber-attack. The loss of systems has been extensively reported and has had
a significant impact on JLR, halting vehicle production, vehicle deliveries
and parts distribution across the UK. The Group has 10 JLR dealerships and
the impact of the system outage has been significant with September trading
profit impacted by £2.0m. The Board currently anticipate the impact on
Group adjusted profit before tax for FY26 to be a one-off reduction of up to
£5.5m, depending on the timing of full restoration of JLR systems and normal
trading. Excluding this impact of the JLR cyber-attack, the underlying
profit before tax of the Group for the full year is expected to be in line
with market expectations(5).
The Group has an insurance policy which includes business interruption
coverage arising from third-party system outages. We are currently in the
process of reviewing the extent of losses or increased costs of working that
may be covered under this policy. The Group's insurance advisor is Willis
Towers Watson. The Board will update shareholders in due course on the
extent of the impact and whether losses can be claimed under this policy.
The following are pertinent in assessing the performance of the Group in the
Period.
· The Group faced a number of external challenges impacting
trading. The new car market was negatively impacted by continued pressure
around the UK Government's ZEV mandate, as well as economic and political
uncertainty weighing on consumer confidence. It is, however, encouraging to
see the developments of amendments to the ZEV mandate announced in April 2025
and the announcement in July 2025, of Government battery electric vehicle
("BEV") grants which benefit many of the Group's franchises and are expected
to improve demand for new BEV cars in H2.
· The Group also faced cost headwinds following the Government's
Autumn 2024 Statement, increasing National Minimum Wage and Employer National
Insurance, putting pressure on the Group's operating cost base. The Group
navigated this pressure proactively by executing cost reductions to offset the
Government related cost pressures and, therefore, keeping costs stable. Cost
control through deployment of technology and innovative thinking remains
critical, given pressures in the cost base continue. The key here is to
reduce costs without impacting gross profit generation or customer experience
and future retention.
· The Group focused on achieving operational excellence in more
controllable areas of the business. As a result, the Group saw a resilient
performance from its used car department with increased like-for-like gross
profit generation, a strong result given supply constraints in the Group's
core used car age cohorts and the demand impact of lower consumer confidence.
In the aftersales arena, the Group focused on initiatives to increase average
invoice values, and improved pricing resulting in growth from the high margin
aftersales business.
· Between February and April, the Group undertook a major project
to rebrand all Group outlets (except Ferrari) under the Vertu brand. This
saw the end of the Macklin Motors and Bristol Street Motors brands. This
major project was well executed and the Group has already seen national
prompted brand awareness for the Vertu brand increase from 11% in March, to
19% in September. There are clear benefits to accrue from a single,
concentrated brand such as simplified systems and processes and higher
marketing return on investment. For example, in July 2025 a ten-day used car
sale event was executed across all outlets using a varied media mix. The
event was highly successful and led to a significant growth in sales and a
strong return on investment from marketing.
Senior management structure
The Group is underpinned by a stable leadership structure which is at the core
of delivery of operational and financial results, especially during periods of
market volatility. To further enhance the senior leadership team, two new
roles are being created with two internal promotions from Group Operations
Directors to Managing Directors, effective from 1 January 2026. This will
have multiple benefits for the Group. Leon Caruso and Anthony Masterson are
currently Group Operations Directors overseeing the Group's JLR and BMW
divisions. They have been with the Group seven and five years respectively
and have been key members of the Group's Next Generation senior leadership
development programme. The Managing Directors will oversee Group dealership
operations providing resource and dedication to maximise focus. This will
reduce the CEO's span of control to enable Robert as CEO to concentrate on
Manufacturer relationships and execution of Group strategy and to spend more
time in the Group's dealerships and operations. It will also allow more of
his time to be spent on acquisitions, portfolio management, capital allocation
and growth and senior management development.
Capital allocation and growth
Ensuring appropriate returns to shareholders through the use of capital
allocation is critical to the long-term success of the Group and remains at
the top of the Board's agenda. In February 2025, the Group announced a
significant £12.0m Share Buyback programme to be spent over the period to 28
February 2026. The Group has continued to deploy capital in respect of this
programme throughout the Period with £7.0m of the £12.0m authority having
been expended to 30 September 2025.
Since the share buyback programmes began in July 2017, over £42m has been
returned to shareholders through the repurchase of shares, reducing the
Group's shares in issue by over 19%.
In the Period, the Group also returned £3.7m to shareholders by the payment
of a final dividend in respect of FY25, with a further dividend of 0.9p per
share in respect of H1 FY26 to be paid in January 2026.
The Group has always been growth-focused and undertaken acquisitions. Growth
has never been uniform, with significant acquisitions completed during and
following the Global Financial Crisis and Covid. At the present time, the
Board is focused on maximising the current portfolio's performance and
ensuring the franchise mix reflects changes in the likely future structure of
the sector, such as the rise of Chinese brands.
Sector trends are likely to create opportunities for the Group which will be
assessed, and future significant growth is likely to be undertaken once the
sector outlook clears, economic stability is more certain and investment
returns can be assessed with greater clarity. The Board remains committed to
ensuring the Group is one of the major scaled automotive retailers in the
UK. There are now six supergroups in the UK with revenues over £4bn and the
Group is firmly one of them.
It's rewarding to see on my dealership visits and those undertaken by the
Board, how each colleague has contributed to the success of the Group, and I
would like to thank them for their efforts. The dedication they continue to
demonstrate is both exemplary and humbling. Whilst the new car market
challenges remain, the Board is pleased with the delivery of strategy and
performance.
Andy Goss, Chairman
(4) Adjusted to remove non-underlying items.
(5) According to compiled data at 7 October 2025, the current consensus of
three sell side analysts' expectations for FY26. Adjusted profit before tax
is £27.2m, with a range of £26.5m to £27.5m.
CHIEF EXECUTIVE'S REVIEW
Current Trading and Outlook
JLR disruption
On 31 August 2025, one of the Group's Manufacturer partners, Jaguar Land Rover
('JLR'), suffered a major cyber-attack that forced a global JLR IT systems
shutdown. The attack halted production at key UK plants and disrupted
operations worldwide. This has clearly had a material impact on the
Manufacturer's UK operations and their entire supply chain. Retail operations
were also affected, with dealerships unable to register or deliver new
vehicles, which was especially disruptive during the key plate change month of
September. The system outage has also impacted on aftersales operations within
the Group's dealerships. Diagnostic and parts ordering systems have been
offline which has impacted vehicle servicing and repair capability. The
Group has a significant portfolio of 10 JLR dealerships and September trading
profit was impacted by £2.0m as a result of this rare event. The Board
currently anticipate the impact on Group adjusted profit before tax for FY26
will be a one-off reduction of up to £5.5m, depending on the timing of full
restoration of JLR systems and resumption of normal trading. The Group
remains in regular dialogue with JLR and notes an easing of the situation in
recent days.
The Group holds an insurance policy which includes business interruption
coverage for third-party system outages. We are reviewing the extent of
losses and increased costs of working that may be covered under this policy.
The Group's insurance advisor is Willis Towers Watson. The Board will update
shareholders in due course on the extent of the losses and whether losses can
be claimed under this policy.
September trading and outlook
The Group's September performance delivered profits above prior year levels,
excluding the one-off impact of the JLR cyber-attack.
Like-for-like new retail car sales growth of 1.8% was delivered including
significant sales of BEV product aided by the new Government grants and
increased discounting in the market. Gross margins were lower as a result of
retailers contributing to strong consumer offers promoted by some
Manufacturers. Volume growth was below the SMMT reported 8.9% increase in UK
retail registrations year-on-year with the figures enhanced by a significant
increase in tactical pre-registration activity. Combined new retail and
Motability gross profit generated (excluding JLR) was lower than last year
predominantly due to a 14.8% like-for-like reduction in Motability volumes.
These volumes are likely to stabilise in the coming months then rise next year
due to the timing of Motability renewals.
The Group's like-for-like fleet and commercial volumes increased by 25.0% and
1.5% respectively in September with increased gross profit generation
(excluding JLR).
Like-for-like used car volumes grew strongly by 5.8%, a good result given
continued supply constraints and subdued consumer sentiment. This result was
aided by good inventory holding levels at 31 August 2025 coming into
September. Used vehicle margins in the Core Group strengthened to 7.0%
(September 2024: 6.7%) reflecting strong pricing disciplines in the Group
supported by our Vertu Insights analytics, the Group's used car pricing
algorithm.
Aftersales demand remained strong, and profitability was aided by one
additional working day year-on-year and enhanced pricing. These factors
drove improved gross profit generation (excluding JLR) compared to prior
period.
The Board remains cautious on outlook due to the weak consumer and business
confidence and uncertain macroeconomic conditions. The Board notes that
there is considerable uncertainty ahead of the Autumn Statement at the end of
November which could impact consumer and business confidence further.
Despite this, underlying profit before tax is expected to be in line with
market expectations, excluding the one-off impact of the JLR cyber-attack.
The Group is very clear of its strategic priorities including further growth
in sales outlets, delivering enhanced returns from acquisitions and start-up
outlets, tight control of costs and the continued share buyback programme to
drive shareholder value creation.
Sector Trends
The automotive sector is undergoing a period of major change as a result of a
number of sector and wider macro-economic factors, representing both
challenges and opportunities for the Group. The key themes which have had an
impact on the Group in the Period are identified and discussed below:
· Electrification
The UK Government continues to lead globally in its push for Battery Electric
Vehicle (BEV) adoption. The Zero Emission Vehicle (ZEV) mandate requires 28%
of UK new car sales to be BEVs in 2025, rising to 80% by 2030. Vans are
subject to similar targets, albeit on a slower trajectory. BEV registrations
accounted for 21.9% of new passenger car sales in the first eight months of
2025, up from 19.6% the previous year, with the expectation that the 28% 2025
target will almost certainly be missed. Manufacturers have responded by
heavily discounting BEVs and prioritising fleet channels to boost volumes,
often at the expense of profitability, and, in some cases, by restricting
availability of non-BEV models.
Affordability is improving significantly, with over 40 BEV models now
available under £30,000 and some sub-£20,000 options from brands like
Hyundai and Dacia. The average price gap between BEVs and internal
combustion engine (ICE) vehicles has narrowed to just 20%, compared to over
50% five years ago. These developments are helping to accelerate consumer
adoption, albeit not at the pace of ZEV mandate targets. Reflecting this
momentum and a strong focus on the importance of BEV sales, the Group's
like-for-like retail BEV sales volumes grew by 82.4% in H1 2025, well ahead of
the UK BEV market growth of 55.2%. This market share gain exhibits the
Group's ability to deliver on focused strategies across a scaled business.
Retailers are under pressure from Manufacturers, who tie BEV mix targets to
bonus eligibility and are reducing margins to make new car consumer offers
more attractive. These Manufacturer actions reflect the pressure they are
under to drive the BEV market to avoid fines and to compete with competitors
who now have access to Government grants. Legislative changes announced in
April 2025, including a reduction in fines from £15,000 to £12,000 per
excess non-BEV sold and an extension for hybrid vehicle sales beyond 2030,
have provided some relief. However, the ZEV mandate continues to weigh
heavily on both Manufacturers and retailers and has resulted in low overall
volumes in the new vehicle market in the UK. Within this smaller market, the
share of fleet registrations remains very high, driven in part by strong
fiscal incentives for BEV for corporate users and subdued retail demand.
In July 2025, the Government introduced a series of grants to stimulate BEV
demand across all channels. Although some customers delayed purchases
pending clarity on model eligibility and pricing, the confirmed availability
of grants across many brands is expected to drive incremental volumes into
H2. This, combined with manufacturer-led discounts, has contributed to
stronger BEV retail sales in September.
· Chinese Brands
A key feature of the UK car market in the Period has been the expansion of
representation from Chinese Manufacturers with Chinese brands nearly doubling
their market share in the first half of 2025. This is no doubt aided by the
increasing interest in, and adoption of BEV. It should be noted that Chinese
Manufacturers have not qualified for the UK BEV grants.
MG, SMART and LEVC have been established in the UK for several years and are
represented by the Group. Other Chinese new entrants into the UK car market
include Omoda, Jaecoo, Leapmotor, GWM and Xpeng with more expected to
follow. The UK, as the fourth-largest BEV market globally and one of the
major economies without significant tariffs on Chinese BEV imports, presents a
highly attractive opportunity for Chinese Manufacturers. These cars are well
designed and have excellent technology, both in terms of connected car
capability and battery technology. In addition, many Chinese Manufacturers
are selling both pure BEV and the more popular hybrid vehicles.
The Group began representing BYD in 2024 with two sales outlets currently in
operation and a further three to be opened in November 2025. The Group
continues to consider and evaluate investment opportunities to ensure that it
has suitable representation of these growing brands, in an aim to reflect the
changing shape of the UK market, always mindful of likely returns on any
incremental investments.
· Financial Conduct Authority
In August 2025, the Supreme Court issued its judgement relating to Court of
Appeal rulings in October 2024 around historic finance commissions in the
sector. The Supreme Court dismissed the claims regarding bribery and
fiduciary duties owed by automotive retailers to customers. It upheld one of
the Court of Appeal decisions relating to an unfair relationship between the
customer and the lender, albeit based on the facts of that specific case
alone.
Following the judgement, the Financial Conduct Authority (FCA) issued a
consultation document on 7 October 2025 regarding a proposed redress scheme
for motor finance customers, with payments to consumers expected to start in
2026. The consultation will run for six-weeks, and the Group will provide
structured feedback within the required timescales.
Although the structure and details of any redress scheme are not final,
redress is proposed to be based on a definition of unfair relationships
between some customers and lenders. Any redress payable is proposed to be
initially levied on lenders, rather than on automotive retailers as credit
brokers.
The Board does not currently consider that provisions are required to be made
in respect of any exposures in this area and will update shareholders as the
position becomes clearer.
· Other Regulatory Changes
The Group is actively involved with consultation with HM Treasury, including
attending a bi-lateral meeting with the Treasury on the matter on 30 September
2025, following publication of draft legislation by HMRC on Employee Car
Ownership Schemes ("ECOS") in July 2025.
The HMRC draft legislation fundamentally changes the tax treatment of ECOS
whereby such vehicles will be treated as company cars subject to benefit in
kind taxation. The Group currently has almost 250 colleagues on an ECOS
scheme, which is a well-established structure that supports around 5% of UK
new vehicle registrations, underpinning a large share of the nearly-new car
market, including significant numbers of UK produced cars.
The Group believes that the proposals will have a significant macro-economic
impact as changing the taxation of such schemes will lead to Manufacturers not
producing those vehicles, damaging both the new and used UK car markets.
Furthermore, the Group has estimated the changes would reduce taxation income
into HMRC by over £7.0m per annum for the Group's volumes alone, primarily in
lost VAT. The changes, which were initially planned to be implemented in
April 2026 have been delayed until October 2026.
As well as vehicle market impacts, if implemented, the Board estimates a rise
in Group vehicle costs and employment costs of up to £2.5m could be
incurred. Primarily, this would be due to a move to contract hire vehicles
for the Group's internal fleet, with monthly lease payments and increased
employment taxes arising. Clearly, should they arise, the Group will seek to
minimise these costs where possible.
Execution of Group Strategy
The Group has made significant progress in the Period on progression towards
its strategic goals. Key highlights include the following:
Developing the scale of the Group through active portfolio management
The Group has an excellent platform of management, colleagues, processes and
systems, allowing it to capitalise on growth opportunities and deliver scale
benefits. It is one of the six motor retail 'supergroups' in the UK, each
with revenues in excess of £4bn. The franchised retail market in the UK
remains very fragmented with the Group representing just over 5% of sector
activity.
The Board remains actively engaged in the management of the Group's portfolio,
continuously assessing growth opportunities and the long-term potential of
existing businesses. Investment and retrenchment decisions are guided by
strict return metrics to ensure disciplined capital allocation. Further
limited dealership closures and refranchising actions are likely.
The Group commenced its presence with the Chinese Brand BYD in the year ended
28 February 2025, with outlets opening in Worcester and Gloucester. The
Group has continued to review further opportunities with the BYD franchise in
the Period and as a result, will open three new BYD sales outlets, by November
2025, in Hartlepool, Macclesfield and Morpeth. This increases the number of
BYD outlets in the Group to five. This initiative is part of the Group's
strategy to reflect the likely increase in market share taken by Chinese
Manufacturers in the years ahead.
The Group's existing Motornation dealership in Tamworth was refranchised
during the Period and since 1 July 2025 now operates the Nissan franchise.
Following a strategic review of returns, the Group exited two businesses in
the Period. In June 2025 the Group closed a Citroen sales outlet which
operated from leasehold premises in Nottingham. This will be refranchised to
the Skoda franchise in November 2025.
In August 2025, the Group closed the Group's final Motornation used car sales
outlet which operated from a freehold site in Derby on which the Group also
operates separate Nissan, Renault, Dacia, Peugeot and Skoda sales outlets.
This closure will improve the used car and aftersales capacity of the
remaining franchised sales outlets on the site.
The Group announced in October 2025 the closure of Nottingham Honda
Motorcycles. The business has not been delivering appropriate returns for a
number of years. The Group will aim to identify a new franchise car
opportunity for the showroom capacity alongside Honda cars, which will remain
on the site.
Following the closure of two underperforming dealerships in Dorchester and
Barnstaple in the year ended 28 February 2025, sales of both vacant freehold
properties classified as held for sale at 28 February 2025, were completed
during the Period. In addition, a further surplus property in Sittingbourne
which was previously used as a parts storage facility, also classified as held
for sale at 28 February 2025, was sold in the Period. Each property generated
sales proceeds equal to, or in excess of book value, realising total cash
consideration of £3.3m, 10.7% above book value. Progress is being made on
realising additional properties held for resale.
Cost Control
The Group has a proven track record of maintaining a strong focus on cost
control. This was particularly important in the Period given the cost
headwinds faced by the Group as a result of the UK economic environment and
Government actions. The Group maintained a like-for-like operating cost base
of just 0.3% (£0.7m) above the prior year which was very pleasing given the
aforementioned cost headwinds. This was the result of decisive action taken by
the Group on cost, following the Autumn 2024 statement. Digitisation was a
major component of how the Group has, and will, pursue further productivity
increases and cost efficiencies.
Digitalisation Developments
Our 60-strong in-house development team drives the Group's digitalisation
initiatives. These efforts consistently enhance our customer offering,
maximise profitability, and improve operational efficiencies. Our investment
in systems and operational developments has empowered the Group to standardise
processes, improve controls, and access real-time management information for
swift, data-driven decision-making. The Board is excited as how these
activities can continue to improve the business going forward
The following highlights some of the key areas of digitalisation where the
Group has made progress in the Period:
· Artificial Intelligence ("AI") Adoption
The Group's AI initiatives focus on practical applications that provide
measurable business benefits, including cost efficiency and return on
investment. The Executive team are directly involved in setting out goals
and objectives in this area and directing AI strategy. To date, efforts have
concentrated on improving telephony and customer contact handling efficiency.
There are multiple pilot projects underway that are already demonstrating
value, including AI-driven outbound service bookings and automation of some
contact centre functionality. It is anticipated these AI deployments will
lead to increased efficiencies in our central contact centre operations.
Additionally, an "AI Dragons Den" competition encouraged colleagues amongst
the Group's 60-strong software development team to propose AI-based proof of
concept ideas. The winning project to automate personalised and timely
responses to incoming leads from Manufacturer websites will be deployed before
the end of the financial year.
· Website Re-Platforming and developments
In the February 2025 annual report and financial statements, the Group shared
plans to rebuild our main retail website. This has been aided by the Group now
operating a single website under the single Vertu brand. This project is
progressing well on a modular basis and will be fully complete in mid-2026.
All work is being undertaken in-house with costs tightly controlled.
The Group reviewed the Group's Search Engine Optimisation ("SEO") strategy
12-months ago and has boosted visibility of key search terms considerably,
putting the Group ahead of our competitors for the Period. Website load
speeds have substantially increased without reducing image quality.
The Group has identified that, whilst website functionality and search engine
optimisation are well on the way to being sector leading, innovation and focus
is required on greater video content and greater use of YouTube channels.
This is particularly critical as AI search gathers pace. A new strategy is
being developed and executed as a result.
· Finance efficiency through automation
The Group is dedicating significant resource to re-engineering and automating
our finance functions to drive efficiency in process and productivity. Notable
developments in the Period include:
- The rollout of automated invoicing in the Vertu Cosmetic Repair
business, automating the production of 21,500 sales ledger invoices and the
posting of costs to 100,000 vehicles per annum. The functionality developed
in-house also automates the corresponding intercompany payments; and
- The implementation of an "Aftersales Dashboard" in service
departments, integrating advanced payment methods and implementing Open
Banking, which provides a saving versus traditional credit/debit card merchant
fees. The dashboard also automates postings into the Group's accounting
system aiding efficiency, removing manual keying in respect of nearly 500,000
receipt transactions annually.
Significant cost savings are being realised as a result of these incentives
with a reduction in operating expenses delivered. The Board envisage further
developments and cost savings will ensue.
Robert Forrester, CEO
CHIEF FINANCIAL OFFICER'S REVIEW
The Group's income statement for the Period is summarised below:
H1 FY26 H1 FY25 Variance
(restated)(6)
£'m £'m %
Revenue 2,510.0 2,474.6 1.4%
Gross Profit 282.2 273.8 3.1%
Gross Margin % 11.2% 11.1% 0.1%
Operating Expenses(6) (251.2) (240.8) (4.3%)
Adjusted Operating Profit 31.0 33.0 (6.1%)
Net Finance Charges (11.0) (10.9) (0.9%)
Adjusted Profit Before Tax 20.0 22.1 (9.5%)
Non-Underlying Items(7) (0.5) - -
Profit Before Tax 19.5 22.1 (11.8%)
Taxation (5.3) (6.1) 13.1%
Profit After Tax 14.2 16.0 (11.3%)
(6 )Operating expenses include share-based payments and amortisation charges
previously categorised as non-underlying, revenue excludes parts revenue on
vehicle preparation previously included as external revenue.
(7 )Non-underlying items represent reorganisation costs and other
non-underlying charges.
The Group delivered an adjusted profit before tax of £20.0m in the Period.
This performance was below that achieved in the prior year period,
reflecting the relative strength of comparative profits in H1 last year
compared to the year as a whole and relative weakness in the new car market.
Revenue grew by £35.4m to a new record level of £2.5bn in the Period driven
by acquisitions (primarily the Burrows acquisition undertaken in October 2024)
which contributed a £102.8m increase in revenue year-on-year. Core Group
revenues declined by £49.2m. This reduction in Core revenue arose in the
new vehicle department primarily as a result of reduced Motability volumes,
accounting for approximately £55.0m of the reduction. In addition, the move
to the agency model in the MINI franchise, from 1 March 2025, further reduced
Core Group revenue by approximately £13.0m. The agency model replaces the
selling price of the vehicle within revenue with a handling fee which also
augments margins. Dealership closures resulted in a further £18.2m decline
in revenue over the Period.
Gross profit growth was achieved as a result of a resilient used car
performance and strong growth in the Group's high margin aftersales channels.
The aftersales growth was a result of improved pricing and the benefits of a
number of Group initiatives to enhance sales conversion and drive higher
average invoice values. In addition, internal labour rates for preparation
work undertaken in the service departments for the Group's vehicle sales
departments also augmented aftersales margins. As a result of these trends,
the overall Group gross margin increased to 11.2% in the Period (H1 FY25:
11.1%).
The increase in operating expenses was driven by acquisitions with Core Group
operating expenses increasing just 0.3% (£0.7m) on H1 FY25 levels. This was
a positive result given the cost headwinds in the Period, particularly in
salary costs which increased just 0.2%, despite a significant rise in National
Minimum Wage and employers National Insurance Contribution rates from 1 April
2025. The Group undertook headcount reductions post Autumn statement and
prior to the commencement of the current financial year. This reduced the
number of full-time equivalent colleagues by 290.
Net finance charges are just £0.1m above the prior year despite additional
borrowing drawn as a result of the acquisition of Burrows Motor Company
Limited in October 2024. Higher Manufacturer stocking charges and lease
interest were partially offset by increased interest income on cash deposits
and the impact of lower interest rates.
Revenue and Gross Profit by Department
An analysis of total revenue and gross profit by department is set out below:
H1 FY26 H1 FY25
£'m (As restated)(8) Variance
£'m £'m
Revenue
New 740.8 771.8 (31.0)
Fleet & Commercial 549.4 545.5 3.9
Used 1,002.7 950.6 52.1
Aftersales 217.1 206.7 10.4
Total Group Revenue 2,510.0 2,474.6 35.4
Gross Profit
New 56.6 58.4 (1.8)
Fleet & Commercial 27.5 28.2 (0.7)
Used 71.1 68.7 2.4
Aftersales 127.0 118.5 8.5
Total Gross Profit 282.2 273.8 8.4
Gross Margin
New 7.6% 7.6% -
Fleet & Commercial 5.0% 5.2% (0.2%)
Used 7.1% 7.2% (0.1%)
Aftersales(9) 44.7% 43.8% 0.9%
Total Gross Margin 11.2% 11.1% 0.1%
(8) Revenue excludes parts revenue on vehicle preparation previously included
as external
revenue.( )
(9) Aftersales margin expressed on internal and external
revenues.
The total volumes of vehicles sold by the Group and like-for-like trends
against market data are set out below:
Total units sold Like-for-like units sold
H1 FY26 H1 FY25 % % Variance
Variance H1 FY26 H1 FY25
Used retail vehicles 47,799 46,073 3.7% 44,765 44,999 (0.5%)
Direct new retail cars 18,390 17,611 4.4% 16,999 17,302 (1.7%)
Agency new retail cars 1,860 1,236 50.5% 1,819 1,236 47.2%
Total new retail cars 20,250 18,847 7.4% 18,818 18,538 1.5%
Motability cars 8,638 10,688 (19.2%) 8,275 10,643 (22.2%)
Direct fleet cars 11,344 10,060 12.8% 11,018 9,823 12.2%
Agency fleet cars 5,312 3,612 47.1% 4,645 3,611 28.6%
Total fleet cars 16,656 13,672 21.8% 15,663 13,434 16.6%
Commercial vehicles 7,770 8,549 (9.1%) 7,733 8,540 (9.4%)
Total New vehicles 53,314 51,756 3.0% 50,489 51,155 (1.3%)
Total Vehicles 101,113 97,829 3.4% 95,254 96,154 (0.9%)
( ) Like-for-like volume variance to SMMT(10) UK Market (SMMT)
New Retail Car (2.5%) 4.0%
Motability Car (1.1%) (21.1%)
Fleet Car 3.1% 13.5%
Commercial - (9.4%)
( )
(10) Represents the variance of like-for-like Group volumes to the UK trends
reported by SMMT
New retail cars and Motability sales
Overall from a very low base, UK retail car registrations increased 4.0%(11)
in the Period, despite continued pressure from the ZEV mandate and the impact
of subdued consumer confidence. This follows 2024 being the lowest volume
new retail market in 25 years. This market growth was undoubtedly aided by
pre-registration activity as well as a significant uplift in Chinese brand
vehicle registrations. The Group's like-for-like new retail volumes grew
1.5% in the Period. This growth was slower than the overall market growth,
which reflects the Group's brand mix and the level of pre-registration in the
market statistics not reflected in the Group's new retail volumes (with
pre-registration activity subsequently being sold in the used car channel).
Motability registrations have significantly reduced, with the market seeing a
21.1% reduction year-on-year and the Group seeing a similar trend. The
registrations via this channel were impacted by timing of renewals in the
3-year cycle and differing strategic appetite from this high-cost channel from
a number of the Manufacturers which the Group represents. Some of the big
traditional players have been losing market share. The Group remains
Motability's largest partner in the UK. It is anticipated that Motability
renewal levels will increase from March 2026.
As a result of the change in sales mix, with lower margin Motability sales
accounting for a smaller proportion of the Group's total new car volumes in
the Period, and more volume through agency arrangements, new car margins in
the Core Group grew to 7.7% (H1 FY25: 7.5%).
Like-for-like gross profits from the sale of new retail and Motability
vehicles declined by £4.4m, principally as a result of reduced Motability
volume. This was clearly a major headwind for the Group in the Period.
(11) Source: SMMT
Fleet & Commercial vehicle sales
The Group remains a major player in the fleet and commercial market, selling
over 24,000 vehicles via this channel in the Period. The Group has deep
experience and capability in many of the different aspects of this channel.
The Group's like-for-like volumes in the fleet car channel grew by 16.6% in
the Period, ahead of the market growth of 13.5%. UK fleet sales, particularly
of BEV vehicles, remain strong, driven by fiscal incentives for corporate
fleets of BEVs.
Conversely, there has been reduced demand in new commercial vehicle sales
throughout 2025, with UK registrations down 9.4% in the Period, and the Group
like-for-like sales volumes mirrored this trend. This market weakness in
commercial vehicles is reflective of weakening business confidence in the UK
and is a reliable lead indicator of economic health.
The Core Group's margins in this combined channel have declined slightly to
4.9% (H1 FY25: 5.2%) reflecting the Group's desire to increase volumes to
reduce Manufacturer vehicle stocking charge levels. Overall, like-for-like
gross profits generated from the fleet and commercial channel reduced by
£1.2m.
Used retail vehicles
Due to the well-documented new car market supply constraints in recent years,
there remain shortages of three-to five-year-old used vehicles in the UK
market. There has been increasing supply of nearly new cars in the UK,
coming from oversupply versus retail demand for new vehicles leading to
pre-registration activity and more frequent daily rental change cycles. Over
time, these trends will see the supply of cars in the critical 3-5 year cohort
increase. Despite these current challenges, the Core Group delivered sales
volumes in the Period just 0.5% below prior year. The Group benefitted from
a highly successful ten-day Group-wide used car sales event in July that
resulted in a significant boost to sales volumes despite tepid consumer
demand.
Used car trade values in the UK market have shown considerable stability over
the Period, driven by the shortage of desirable stock. Margin growth in used
cars has been more muted than might be expected in this supply-constrained
environment. Retail prices have not grown to the same degree as trade
prices, reflecting a relatively subdued consumer and aggressive new car offers
impacting on margins of younger used cars. Despite these market trends and
discounting in the Group's July sales event, the Core Group over the Period
saw stable margins, highlighting the benefits of the Group's "Insights" used
car pricing algorithm and excellent used car stock management.
In March 2025 the Group increased its internal recovery rates which are
charged from the service department in respect of used vehicle preparation.
This increase was reflective of cost inflation in technician remuneration.
This change resulted in an additional cost of £1.8m which has been absorbed
into Core Group used car department gross profit in the Period. After
absorbing this, overall Core Group used car gross profits rose £0.6m
year-on-year on a like-for-like basis, with this increase driven by gross
profit per unit sold growing by 1.2% compared to prior year. This is an
excellent performance.
Aftersales
The Group's high margin aftersales operations are a vital contributor to Group
profitability, generating over 44% of total gross profit. Overall, compared
to the six-month period ended 31 August 2024, the following like-for-like
trends in aftersales performance were seen, with like-for-like gross profit
increasing £4.0m year-on-year. The majority of this growth came from the
higher margin service department.
Accident & Smart Repair Total
Service Parts Forecourt
£'m £'m £'m £'m £'m
Revenue(12) 110.0 139.9 15.1 5.2 270.2
Revenue(12) change (%) 3.7% 2.9% (1.7%) (10.1%) 2.7%
Gross profit 81.1 29.6 9.4 0.4 120.5
Gross profit change 3.6 0.5 (0.1) - 4.0
Gross margin(13) H1 FY25 (%) 73.7% 21.2% 62.2% 8.7% 44.6%
Margin change (%) 0.6% (0.3%) 0.6% 0.2% 0.3%
(12) includes internal and external revenues( )
(13) Aftersales margin expressed on internal and external revenues
( )
· Service
Vehicle service and repair remains a key revenue stream for the Group, with
like-for-like service revenue increasing by £4.0m (3.7%) during the Period.
The Group has successfully executed initiatives to enhance average invoice
value in the Period, including focus on the Group's vehicle health check
("VHC") process and increased use of the Group's Pay Later product, which
allows service customers to defer payments interest-free for up to five months
on repair work identified. This flexible payment option enables more
customers to approve essential repairs identified through the Group's VHC
process and has resulted in higher sales conversion and margin retention.
In addition, as noted above, in March 2025 the Group increased its internal
preparation rates which are charged to the vehicle sales departments, to
better reflect the upward pressure on costs since the prior year. This led to
approximately £2.1m of additional labour gross profit in the Core Group
service department which has been absorbed by the vehicle sales departments.
This represents 58% of the increase in like-for-like service gross profit.
These initiatives combined with other upward pricing actions led to a
year-on-year improvement in like-for-like labour sales and a rise in
like-for-like service gross margins to 73.7% (H1 FY25: 73.1%). Consequently,
service gross profit in the Core Group increased by £3.6m.
· Parts
The Group's extensive parts operations encompass traditional wholesale
activities, agency distribution centres, online parts retailing, and accessory
sales to dealership customers. These operations also supply parts to the
Group's service and accident repair businesses. The Core Group grew Parts
revenue by £4.0m year-on-year to £139.9m, driven by a growth in wholesale
parts sales. This led to a £0.5m increase in gross profit generation in the
Core Group's parts departments. Margins declined slightly to 21.2% in the
Period (H1 FY25: 21.5%) as a result of a shift in sales mix towards lower
margin wholesale activity.
In order to provide additional focus on the Group's profitable parts business,
an internal appointment into a newly created role of Group Parts Director was
made on 1 September 2025.
· Accident and Smart Repair
The Group's accident repair centres and smart repair operations are managed
separately from the dealership businesses in a standalone division.
Like-for-like revenue generated from this revenue stream declined £0.3m in
the Period with gross profit declining £0.1m. This decline arose in the
accident repair centres, with smart repair continuing to exhibit growth.
Declining major accident repair activity reflects trends as vehicle technology
improves and results in fewer and less severe accidents. Increased parts and
labour costs resulted in increased numbers of vehicles being written off,
rather than repaired. The Group delivered a gross margin improvement to
62.2% (H1 FY25: 61.6%) in this channel.
Acquisitions and Closures
Dealerships acquired or closed since 1 March 2024 have contributed an
additional £0.3m operating loss in the Period compared to prior year, as
summarised below:
Start-ups & Acquisitions Closures Total
£'m £'m £'m
H1 FY26
Revenue 111.2 9.7 120.9
Gross Profit 12.8 0.5 13.3
Operating Loss (0.8) (0.6) (1.4)
H1 FY25
Revenue 8.4 27.9 36.3
Gross Profit 0.9 3.0 3.9
Operating Loss (0.6) (0.5) (1.1)
H1 FY26 variance to H1 FY25
Revenue 102.8 (18.2) 84.6
Gross Profit 11.9 (2.5) 9.4
Operating (Loss)/Profit (0.2) (0.1) (0.3)
Acquisitions include new start-up operations opened in the last 12-months by
the Group. These have incurred, as anticipated, start-up losses. These
operations are anticipated to see reduced losses in the next 12-months and a
move to profitability. The dealership closures will also augment future
profits and lead to improved cost structures in the Group since these
operations have higher cost bases versus revenues than the Group as a whole.
Operating Expenses
A summary of Core Group operating expenses is set out below:
H1 FY26 H1 FY25 H1 FY26 Var to H1 FY25
£'m £'m £'m %
Salary costs 132.9 132.6 0.3 0.2%
Vehicle and valeting costs 27.0 28.9 (1.9) (6.6%)
Property costs and depreciation 29.4 27.8 1.6 5.8%
Marketing costs 20.1 18.0 2.1 11.7%
Other (including IT costs) 25.2 27.1 (1.9) (7.0%)
Share based payments and amortisation 1.9 1.4 0.5 35.7%
Core Group operating expenses 236.5 235.8 0.7 0.3%
Core Group operating expenses as a % of Core Group revenues 10.0% 9.7%
0.3%
Acquisitions 13.5 1.5 12.0
Disposals 1.1 3.5 (2.4)
Total Group underlying operating expenses 251.1 240.8 10.3 4.3%
Operating expenses as a % of revenue 10.0% 9.7% 0.3%
Core Group operating expenses totalled £236.5m in the Period, just 0.3%
(£0.7m) up on H1 FY25 despite ongoing cost pressures in the UK economy,
reflecting the success of the Group's strong focus on cost control in the
Period. Dealerships acquired in the period since 1 March 2024, net of
closures, contributed a further £9.5m of operating expenses in the Period
such that, overall, total Group underlying operating expenses increased by
£10.2m in the Period compared to H1 FY25. Despite this strong focus on cost
control, operating expenses as a % of revenue increased by 0.2% in the total
Group and by 0.3% in the Core Group. This reflects the reduced revenue as a
result of a challenging new car market impacting vehicle volumes and the
dilutive impact of dealership acquisitions and startups including those of
Chinese brands. It is anticipated maturing businesses and the closure of
loss-making businesses will aid operating expense trends going forward.
Salary costs represent over half of Core Group operating expenses and are the
biggest single cost to the Group. Salary costs in the Core Group have
increased just £0.3m year-on-year despite the increased costs enforced by the
2024 Autumn budget. The changes resulted in rises in National Minimum Wage
and an increase in the rate of Employer's National Insurance which were
enacted in April 2025 with a combined forecast annual impact of £10.0m. As
previously reported, the Group took decisive action in H2 FY25, including a
targeted headcount reduction programme to mitigate the impact of these
rises. The impact of these actions is clear. The Group continues to strive
for process efficiencies and progressed towards centralising a number of key
finance functions into divisional hub structures. This action delivered a
further headcount reduction in the Period and the resulting termination costs
have been included in non-underlying items.
The Core Group saw a £2.1m (11.7%) increase in marketing costs in the
Period. This reflects the Group's investment in the move to a single brand
"Vertu". This strategy is anticipated to yield process efficiencies and cost
savings going forward from the reduction in websites and brand complexity.
Marketing activity was augmented in the changeover from Bristol Street
Motors to Vertu in April and, in addition, marketing costs include the cost of
the Group wide sale event in July, for which there was no comparative event
last year. This significantly aided the resilient performance of the used
car department in the Period.
Vehicle and valeting costs in the Core Group have reduced by £1.9m (6.6%) in
the Period as action was taken to reduce costs in this area. The Group has
applied behavioural science to encourage customers to opt out of a "wash and
vac" in the service department following customer visits and introduced
charging for this service in several divisions. Further cost savings will
arise as the strategy is rolled out to a number of the Group's other divisions
and are annualised. A profit enhancement of approximately £0.4m in the
Period arose. The remaining saving in this area has been driven by active
management of the Group's courtesy and demonstrator fleets to minimise costs
where possible.
Other costs have decreased by £1.9m (7.0%) year-on-year reflecting the
Group's sharp focus on all aspects of its cost base in the Period. This
includes a £0.6m reduction in energy costs partly due to the Group's
effective buying strategy and use of self-generated solar powered energy.
The Group continues to invest in solar panel installation, with a second phase
planned costing £0.9m at a further 18 dealerships in H2 FY26 after stringent
consideration of the applicable return on investment.
Share based payments and amortisation, which are now included within
underlying expenses, have increased by £0.5m year-on-year as a result of the
continued use of share award schemes as a key element of remuneration packages
for senior managers, which includes the impact of managers in businesses
acquired.
Net Finance Charges
The movement in net finance charges is analysed below:
H1 FY26 H1 FY25 H1 FY26 Var to H1 FY25
£'m £'m £'m
Interest on bank borrowings 4.8 4.8 -
New vehicle Manufacturer stocking interest 4.7 4.5 0.2
Interest on lease liabilities 2.0 1.8 0.2
Used vehicle stock funding interest 0.2 0.3 (0.1)
Interest on bank deposits (0.6) (0.4) (0.2)
Net finance income relating to defined benefit pension scheme (0.1) (0.1) -
Net Finance Charges 11.0 10.9 0.1
The overall increase in net finance charges of £0.1m is driven by increased
numbers of outlets in the Group following the Burrows acquisition, new vehicle
stocking charges and interest on lease liabilities. The movement in lease
interest of £0.2m in the Period is a result of lease extensions negotiated on
certain Group properties and an increase in the number of contract hire
courtesy vehicles, as part of the strategy to reduce vehicle running costs.
The £0.2m year-on-year increase in Manufacturer stocking charges is as a
result of higher new car stocking levels despite reduced interest rates. In
part, this is due to oversupply in the retail new car channel in some
franchises and additional numbers of dealerships. In addition, higher fleet
volumes from tactical registration activity in the Period have also led to
increased stocking charges.
Interest on bank borrowings includes the cost of the 20-year mortgage
facilities from BMW Financial Services, where £74.3m remains outstanding at
31 August 2025 (28 February 2025: £76.4m) and a 10-year mortgage facility
with Toyota Financial Services, where £7.0m remains outstanding at 31 August
2025 (28 February 2025: £7.4m), as well as interest on the £56m drawn on the
Group's Revolving Credit Facility ("RCF") with three major banks.
£12.0m of the RCF was drawn in October 2024 to fund the acquisition of
Burrows Motor Company Limited, which also brought the Toyota Financial
Services mortgage into the Group. The growth in interest costs as a result of
this increase in funding has been offset by reduced mortgage interest as the
balance has reduced due to the monthly principal repayments.
Non-underlying items
H1 FY26 H1 FY25
(re-stated)
£'m £'m
Redundancy costs 0.3 -
Site closure costs 0.2 -
0.5 -
The Group continued its strong focus on cost control in the Period, taking
several actions to remove avoidable cost from the business.
Firstly, the Group made progress in delivering its finance efficiency
programme, centralising a number of finance processing functions into
divisional hubs. As a consequence, the Group incurred redundancy costs in
respect of 45 colleagues in the Period with headcount reductions partially
off-set by recruitment in other geographical areas. The associated
termination costs of £0.3m have been included in non-underlying costs due to
the scale and one-off nature of this initiative.
In addition, following a strategic review of returns in the Period, the Group
closed a Citroen dealership in Nottingham and the Group's last used car sales
outlet in Derby. The associated closure costs in respect of these outlets of
£0.2m have been included in non-underlying costs.
As previously highlighted, the share-based payment charge and amortisation
costs were reclassified in the full year report and accounts to 28 February
2025 from non-underlying items into underlying items, restating the
comparatives on the same basis. As a result, £1.4m has been reclassified from
non-underlying items to underlying items for the period ended 31 August 2024.
Tax
The Group's underlying effective rate of tax for the Period was 26.8% (H1
FY25: 27.7%). This is higher than the headline rate of corporation tax in
the UK of 25% as a result of non-qualifying depreciation. The total tax
charge for the Period was £5.3m (H1 FY25: £6.1m). The Group continues to
be classified as "low risk" and takes a pro-active approach to minimising tax
liabilities whilst ensuring it pays the appropriate level of tax to the UK
Government.
Dividend
An interim dividend of 0.90p per share (H1 FY25: 0.90p) in respect of FY26
will be paid on 16 January 2026. The ex-dividend date will be 11 December
2025 and the associated record date 12 December 2025.
Cash Flows
A cash outflow from working capital in the Period of £21.0m reflects an
increase in used vehicle inventory levels and reduced vehicle deposits
compared to the position at 28 February 2025.
As a result of the continued market weakness in new cars, and September being
a smaller plate change month than March, the Group did not reduce its used car
stock holding to the same extent that it did at 28 February 2025. This
decision aided a strong growth in September used vehicle sales. £14.5m of
cash has been absorbed in used car inventory in the Period as a result. It
should be noted used car stock levels declined from 31 August 2024 to 2025
despite acquisition growth.
Vehicle deposits taken in advance of delivery were £11.2m lower at 31 August
2025 than 28 February 2025 as a result of the strong new car market in March
2025, ahead of Vehicle Excise Duty changes in April 2025 compared to
September. In contrast, ordertake into September reflected some deferral in
consumer activity as consumers awaited clarity on eligibility for government
grants on electric vehicles. As a result, £11.2m was absorbed in the Period
from lower deposits.
Despite the net cash outflow from working capital described above, the Group
generated a broadly neutral Free Cash Flow in the Period with an inflow of
£0.4m compared to a Free Cash Outflow of £14.3m in H1 FY25.
In the Period, the Group successfully disposed of three of the properties held
for resale at 28 February 2025, delivering a cash inflow of £3.3m and
generating a profit on disposal of £0.3m. This included two former BMW
dealerships in Dorchester and Barnstaple which were closed in the year ended
28 February 2025 and a former parts storage warehouse in Sittingbourne. All
three properties were included within properties held for sale at 28 February
2025. These sales proceeds have been deducted in arriving at net capital
expenditure of £7.6m incurred in the Period. £2.5m of this net expenditure
was incurred in respect of projects which add additional capacity to the
Group, including investments in additional capacity at Chesterfield Toyota and
Plymouth Honda as well as the completion of a new off-site vehicle preparation
centre at York BMW. This £2.5m has therefore been excluded from the
calculation of Cash Flow in the Period.
The Group announced a £12.0m share buy-back programme on 6 February 2025 and
began deploying capital under this programme immediately. In the financial
year to date, the Group has continued to buy back shares, repurchasing
approximately 9.4m shares, representing 2.8% of opening shares in issue, for a
total cost of £5.6m. The total expended under the current authority to 30
September 2025 was £7.0m, leaving £5.0m remaining to deploy. The Board
believes that this is an attractive use of capital and will continue its
programme of buy-backs as a relevant element of returns to shareholders,
alongside dividend payments. The Group has now purchased over 19% of its
share capital because of buyback programmes operating since FY18. £3.7m was
spent on dividends in the Period in respect of the final dividend paid in
respect of the year ended 28 February 2025.
The Group has operated a very successful service plan offering for customers,
with customers paying monthly amounts towards future servicing and receiving
fixed or discounted pricing in return, with flexibility to withdraw and obtain
a refund at any time. From 1 January 2026, the Digital Markets, Competition
and Consumers Act 2024 brings into force new rules for "consumer savings
schemes contracts". Although not specifically aimed at service plan
arrangements, there is potential that the service plan amounts paid by
customers and not yet spent by them on servicing will be caught by these new
rules. If applicable, the Group will be required to obtain an insurance
policy to protect service plan customers' money or to hold the associated
funds in an external trust account. In this latter case, the cash balances
held would cease to form part of the net debt undertaken. The Group is
currently exploring the optimum route to take. The amount of service plan
monies held within the net debt of the Group at 31 August 2025 was £14.0m.
Karen Anderson, CFO
For the six months ended 31 August 2025
Six months ended 31 August 2025 Six months ended 31 August 2024 Year ended 28 February 2025
(as restated - Note 2)
Note Underlying items Non-underlying items Total Underlying items Non-underlying items Total Underlying items Non- Total
(note 4) (note 4) underlying items
(note 4)
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 2,510,027 - 2,510,027 2,474,639 - 2,474,639 4,763,926 - 4,763,926
Cost of sales (2,227,836) - (2,227,836) (2,200,813) - (2,200,813) ( (4,230,992) - (4,230,992)
Gross profit 282,191 - 282,191 26 273,826 - 273,826 51 532,934 - 532,934
Operating expenses (251,159) (469) (251,628) (240,885) - (240,885) 5) (480,528) (4,569) (485,097)
Operating profit / (loss) 31,032 (469) 30,563 32,941 - 32,941 52,406 (4,569) 47,837
Finance income 5 808 - 808 555 - 555 1,103 - 1,103
Finance costs 5 (11,834) - (11,834) (11,429) - (11,429) (24,190) - (24,190)
Profit / (loss) before tax 20,006 (469) 19,537 22,067 - 22,067 29,319 (4,569) 24,750
Taxation (5,359) 91 (5,268) (6,112) - (6,112) (7,576) 929 (6,647)
Profit / (loss) for the period attributed to equity holders 14,647 (378) 14,269 15,955 - 15,955 21,743 (3,640) 18,103
Basic earnings per share (p) 7 4.46 4.77 5.48
Diluted earnings per share (p) 7 4.11 4.44 5.10
For the six months ended 31 August 2025
Six months Six months Year
ended ended ended
31 August 31 August 28 February
2025 2024 2025
Note £'000 £'000 £'000
Profit for the period 14,269 15,955 18,103
Other comprehensive (expense) / income
Items that will not be reclassified to profit or loss:
Actuarial (losses) / gains on retirement benefit obligations 10 (149) 608 1,471
Deferred tax relating to actuarial losses / (gains) on retirement benefit 37 (152) (368)
obligations
Items that may be reclassified subsequently to profit or loss:
Cash flow hedges (138) (248) (187)
Deferred tax relating to cash flow hedges 35 45 47
Other comprehensive (expense) / income for the period, net of tax (215) 253 963
Total comprehensive income for the period attributable to equity holders 14,054 16,208
19,066
For the six months ended 31 August 2025
31 August 31 August 28 February
2025 2024 2025
Note £'000 £'000 £'000
Non-current assets
Goodwill and other indefinite life assets 12 136,006 129,332 135,506
Other intangible assets 1,294 1,705 1,557
Retirement benefit asset 3,753 3,060 3,895
Property, plant and equipment 357,787 339,024 357,453
Right-of-use assets 93,677 81,527 83,734
Derivative financial instruments - - 147
592,517 554,648 582,292
Current assets
Inventories 789,781 785,718 816,939
Trade and other receivables 93,880 86,897 98,951
Cash and cash equivalents 58,501 38,649 72,647
942,162 911,264 988,537
Property assets held for sale 5,051 7,780 7,921
Total current assets 947,213 919,044 996,458
Total assets 1,539,730 1,473,692 1,578,750
Current liabilities
Trade and other payables (885,037) (850,196) (940,541)
Current tax liabilities (2,739) (1,547) (148)
Deferred consideration (1,000) - (1,000)
Contract liabilities (11,764) (11,662) (11,753)
Borrowings (5,087) (4,395) (5,081)
Lease liabilities (21,854) (19,272) (19,182)
Total current liabilities (927,481) (887,072) (977,705)
Non-current liabilities
Deferred income tax liabilities (25,986) (23,036) (26,097)
Contract liabilities (8,527) (9,956) (8,435)
Borrowings (131,751) (118,129) (134,133)
Lease liabilities (82,013) (72,250) (74,829)
Total non-current liabilities (248,277) (223,371) (243,494)
Total liabilities (1,175,758) (1,110,443) (1,221,199)
Net assets 363,972 363,249 357,551
Capital and reserves attributable to equity holders of the Group
Ordinary share capital 32,070 33,452 33,010
Share premium 124,939 124,939 124,939
Other reserve 10,645 10,645 10,645
Hedging reserve (23) 17 80
Treasury share reserve (2,337) (3,175) (4,812)
Capital redemption reserve 7,657 6,275 6,717
Retained earnings 191,021 191,096 186,972
Total equity 363,972 363,249 357,551
For the six months ended 31 August 2025
Six months Six months Year
ended ended ended
31 August 31 August 28 February
2025 2024 2025
Note £'000 £'000 £'000
Cash flows from operating activities
Operating profit 30,563 32,941 47,837
Profit on sale of property, plant and equipment (309) (58) (1,168)
(Profit) / loss on lease modification (569) 67 (47)
Amortisation of intangible assets 261 284 558
Depreciation of property, plant and equipment 9,664 8,590 18,201
Depreciation of right of use assets 10,637 10,597 20,239
Impairment charges - - 524
Movement in working capital 11 (21,223) (38,849) 6,986
Share based payments charge 1,451 900 1,890
Cash inflow from operations 30,475 14,472 95,020
Tax received 809 1,291 1,328
Tax paid (3,541) (4,748) (6,462)
Finance income received 703 495 984
Finance costs paid (12,481) (11,198) (24,233)
Net cash inflow from operating activities 15,965 312 66,637
Cash flows from investing activities
Acquisition of businesses, net of cash, overdrafts and borrowings acquired
9 (370) (1,030) (10,961)
Acquisition of freehold and long leasehold land and buildings - - (2,230)
Purchases of intangible assets - (19) (145)
Purchases of other property, plant and equipment (10,853) (11,953) (24,611)
Proceeds from disposal of property, plant and equipment 3,253 800 5,575
Net cash outflow from investing activities (7,970) (12,202) (32,372)
Cash flows from financing activities
Proceeds from borrowings 8 - - 12,526
Repayment of borrowings 8 (2,563) (2,188) (8,097)
Principal elements of lease repayments (10,421) (10,640) (19,954)
Sale of treasury shares 241 34 46
Purchase of treasury shares - - (4,000)
Repurchase of own shares (5,722) (2,234) (4,784)
Dividends paid to equity holders (3,676) (5,032) (7,954)
Net cash outflow from financing activities (22,141) (20,060) (32,217)
8 (14,146) (31,950) 2,048
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at beginning of period 72,647 70,599 70,599
Cash and cash equivalents at end of period 58,501 38,649 72,647
For the six months ended 31 August 2025
Treasury share Capital redemption reserve
Ordinary Share Other Hedging reserve reserve Retained Total
share capital premium reserve earnings equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 March 2025 33,010 124,939 10,645 80 (4,812) 6,717 186,972 357,551
Profit for the period - - - - - - 14,269 14,269
Actuarial losses on retirement benefit obligations - - - - - - (149) (149)
Tax on items taken directly to equity - - - 35 - - 37 72
Fair value losses - - - (138) - - - (138)
Total comprehensive income for the period - - - (103) - - 14,157 14,054
Sale of treasury shares - - - - 2,475 - (2,234) 241
Cancellation of repurchased shares (940) - - - - 940 - -
Repurchase of own shares - - - - - - (5,649) (5,649)
Dividends paid - - - - - - (3,676) (3,676)
Share based payments charge - - - - - - 1,451 1,451
As at 31 August 2025 32,070 124,939 10,645 (23) (2,337) 7,657 191,021 363,972
The repurchase of own shares in the period was made pursuant to the share
buyback programmes announced on 6 February 2025.
9,401,631 ordinary shares to the value of £5,649,000 had been repurchased in
the six months ended 31 August 2025. These shares were cancelled immediately
and accordingly, the nominal value of these shares has been transferred to the
capital redemption reserve.
The 'Other reserve' is a merger reserve, arising from shares issued as
consideration to the former shareholders of acquired companies.
For the six months ended 31 August 2024
Treasury share Capital redemption reserve
Ordinary Share premium Other Hedging reserve reserve Retained Total
share capital reserve earnings equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 March 2024 33,760 124,939 10,645 220 (2,056) 5,967 179,898 353,373
Profit for the period - - - - - - 15,955 15,955
Actuarial gains on retirement benefit obligations - - - - - - 608 608
Tax on items taken directly to equity - - - 45 - - (152) (107)
Fair value losses - - - (248) - - - (248)
Total comprehensive income for the period - - - (203) - - 16,411 16,208
Sale of treasury shares - - - - (1,119) - 1,153 34
Cancellation of repurchased shares (308) - - - - 308 - -
Repurchase of own shares - - - - - (2,234) (2,234)
Dividends paid - - - - - - (5,032) (5,032)
Share based payments charge - - - - - - 900 900
As at 31 August 2024 33,452 124,939 10,645 17 (3,175) 6,275 191,096 363,249
For the year ended 28 February 2025
Share Other Hedging reserve Treasury share Capital redemption reserve Retained Total
Ordinary premium reserve reserve earnings equity
share capital
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 March 2024 33,760 124,939 10,645 220 (2,056) 5,967 179,898 353,373
Profit for the year - - - - - - 18,103 18,103
Actuarial gains on retirement benefit obligations - - - - - - 1,471 1,471
Tax on items taken directly to equity - - - 47 - - (368) (321)
Fair value losses - - - (187) - - - (187)
Total comprehensive income for the year - - - (140) - - 19,206 19,066
Sale of treasury shares - - - - 1,244 - (1,198) 46
Purchase of treasury shares - - - - (4,000) - - (4,000)
Repurchase of own shares - - - - - - (4,870) (4,870)
Cancellation of repurchased shares (750) - - - - 750 - -
Dividends paid - - - - - - (7,954) (7,954)
Share based payments charge - - - - - - 1,890 1,890
As at 28 February 2025 33,010 124,939 10,645 80 (4,812) 6,717 186,972 357,551
NOTES
For the six months ended 31 August 2025
1. Basis of preparation
Vertu Motors plc is a Public Limited Company which is quoted on the AiM Market
and is incorporated and domiciled in the United Kingdom. The address of the
registered office is Vertu House, Fifth Avenue Business Park, Team Valley,
Gateshead, Tyne and Wear, NE11 0XA. The registered number of the Company is
05984855.
The financial information for the period ended 31 August 2025 and similarly
the period ended 31 August 2024 has neither been audited nor reviewed by the
auditors. The financial information for the year ended 28 February 2025 has
been based on information contained in the audited financial statements for
that year.
The information for the year ended 28 February 2025 does not constitute
statutory accounts as defined in section 434 of the Companies Act 2006. A copy
of the statutory accounts for that year has been delivered to the Registrar of
Companies. The Auditors' Report on those accounts was not qualified under
section 498 of the Companies Act 2006.
2. Accounting policies
In line with International Accounting Standard 34 and the Disclosure and
Transparency Rules of the Financial Conduct Authority, these condensed interim
financial statements have been prepared applying the accounting policies and
presentation that were applied in the preparation of the Company's published
consolidated financial statements for the year ended 28 February 2025.
Classification of items in the Income Statement
As set out in the consolidated financial statements for the year ended 28
February 2025, the following reclassifications have been made to the Income
Statement:
· The Group's share-based payment charge and
amortisation charges have been reclassified from non-underlying items into
underlying items. As a result of these changes, previously reported underlying
operating expenses in the six months ended 31 August 2024 have increased by
£1,394,000 and non-underlying operating expenses have decreased by
£1,394,000.
· Revenue in relation to parts used in the
preparation of vehicles for sale has been reclassified due to certain
intercompany transactions not eliminating on consolidation. Consequently, such
income is no longer presented within external revenue. As a result, previously
reported turnover and cost of sales have both decreased by £17,793,000 for
the six months ended 31 August 2024.
3. Segmental information
The Group adopts IFRS 8 "Operating Segments", which determines and presents
operating segments based on information provided to the Group's Chief
Operating Decision Maker ("CODM"), Robert Forrester, Chief Executive
Officer. The CODM receives information about the Group overall and therefore
there is one operating segment.
The CODM assesses the performance of the operating segment based on a measure
of both revenue and gross margin. However, to increase transparency, the
Group has included below an additional voluntary disclosure analysing revenue
and gross margin within the reportable segment.
Six months ended 31 August 2025 Revenue Revenue Mix % Gross Profit Gross Profit Mix Gross Margin %
£'000 £'000 %
Aftersales(14) 217,161 8.7 127,042 45.0 44.7
Used vehicles 1,002,675 39.9 71,081 25.2 7.1
New retail and Motability 740,829 29.5 56,587 20.1 7.6
New fleet & commercial 549,362 21.9 27,481 9.7 5.0
Total 2,510,027 100.0 282,191 100.0 11.2
Six months ended 31 August 2024 (as restated (Note 2)) Revenue Revenue Mix % Gross Profit Gross Profit Mix Gross Margin %
£'000 £'000 %
Aftersales(14) 206,752 8.4 118,572 43.3 43.8
Used vehicles 950,648 38.4 68,637 25.1 7.2
New retail and Motability 771,759 31.2 58,411 21.3 7.6
New fleet & commercial 545,480 22.0 28,206 10.3 5.2
Total 2,474,639 100.0 273,826 100.0 11.1
Year ended 28 February 2025 Revenue Revenue Mix % Gross Gross Profit Gross Margin %
£'000 Profit £'m Mix %
Aftersales(14) 417,799 8.8 236,145 44.3 43.7
Used vehicles 1,851,429 38.9 130,886 24.6 7.1
New retail and Motability 1,439,922 30.2 110,174 20.7 7.7
New fleet & commercial 1,054,776 22.1 55,729 10.4 5.3
Total 4,763,926 100.0 532,934 100.0 11.2
(14) Aftersales margin expressed on internal and external revenue
4. Non-underlying items
Six months Six months Year
ended ended ended
31 August 31 August 28 February
2025 2024 2025
£'000 (as restated - Note 2) £,000
£'000
Redundancy costs (325) - (2,817)
Other site closure costs (144) - (106)
Rebrand costs - - (794)
Acquisition costs - - (328)
Impairment of freehold land and buildings - - (524)
Non-underlying loss before tax (469) - (4,569)
Non-underlying taxation credit 91 - 929
Non-underlying loss after tax (378) - (3,640)
The Group continued its strong focus on cost control in the Period taking
several actions to remove avoidable cost from the business.
Firstly, the Group made progress towards its finance efficiency programme,
centralising a number of finance processing functions into divisional hubs. As
a consequence, the Group incurred redundancy costs in respect of 45 colleagues
in the Period. The associated termination costs of £325,000 have been
included in non-underlying costs due to the scale and one-off nature of this
initiative.
In addition, following a strategic review of returns in the Period, the Group
closed a Citroen dealership in Nottingham and announced the closure of a used
car sales outlet in Derby. The associated closure costs in respect of these
outlets of £144,000 have been included in non-underlying costs.
As previously highlighted, the share-based payment charge and amortisation
costs were reclassified in the full year report and accounts to 28 February
2025 from non-underlying items into underlying items, restating the
comparatives on the same basis. As a result, £1,394,000 has been reclassified
from previously reported non-underlying items to underlying items for the
period ended 31 August 2024.
5. Finance income and costs
Six months Six months Year
ended ended ended
31 August 31 August 28 February
2025 2024 2025
£'000 £'000 £'000
Interest on short-term bank deposits 637 413 983
Net finance income relating to Group pension scheme 105 60 120
Other interest 66 82 -
Finance income 808 555 1,103
Bank loans and overdrafts (4,858) (4,897) (10,277)
Vehicle stocking interest (4,840) (4,693) (9,853)
Lease liability interest (2,136) (1,839) (4,060)
Finance costs (11,834) (11,429) (24,190)
6. Taxation
The Group's underlying effective rate of tax is 26.8% (H1 FY25 (as restated -
Note 2): 27.7%), which is higher than the standard rate of corporation tax in
the UK as a result of the impact of non-qualifying depreciation and
non-deductible expenses. The overall effective tax rate of 27.0% (H1 FY25:
27.7%) includes tax on non-underlying items. The Group continues to be
classified as "low risk" by HMRC and takes a pro-active approach to minimising
tax liabilities whilst ensuring it pays the appropriate level of tax to the UK
Government.
7. Earnings per share
Basic and diluted earnings per share are calculated by dividing the earnings
attributable to equity shareholders by the weighted average number of ordinary
shares during the period or the diluted weighted average number of ordinary
shares in issue in the period.
The Group only has one category of potentially dilutive ordinary shares, which
are share options. A calculation has been undertaken to determine the number
of shares that could have been acquired at fair value (determined as the
average annual market price of the Group's shares) based on the monetary value
of the subscription rights attached to the outstanding share options. The
number of shares calculated as above is compared with the number of shares
that would have been issued assuming the exercise of the share options.
Adjusted earnings per share is calculated by dividing the adjusted earnings
attributable to equity shareholders by the weighted average number of ordinary
shares in issue during the period.
Six months Six months
ended ended Year ended
31 August 31 August 28 February
2025 2024 2025
(as restated - Note 2)
£'000 £'000 £'000
Profit attributable to equity shareholders 14,269 15,955 18,103
Non-underlying loss after tax items 378 - 3,640
Underlying earnings attributable to equity shareholders 21,743
14,647 15,955
Weighted average number of shares in issue ('000s) 320,276 334,324 330,599
Potentially dilutive shares ('000s) 27,038 25,137 24,117
Diluted weighted average number of shares in issue ('000s) 347,314 359,461 354,716
Basic earnings per share 4.46p 4.77p 5.48p
Diluted earnings per share 4.11p 4.44p 5.10p
Underlying earnings per share 4.57p 4.77p 6.58p
Diluted underlying earnings per share 4.22p 4.44p 6.13p
At 31 August 2025, there were 320,700,132 shares in issue (including 3,784,108
held by the Group's employee benefit trust).
8. Reconciliation of net cash flow to movement in net debt
31 August 2025 31 August 2024 28 February 2025
£'000 £'000 £'000
Net (decrease) / increase in cash and cash equivalents (14,146) (31,950) 2,048
Cash inflow from proceeds of borrowings - - (12,526)
Cash outflow from repayment of borrowings 2,563 2,188 8,097
Cash movement in net debt (11,583) (29,762) (2,381)
Borrowings acquired - - (10,569)
Capitalisation of loan arrangement fees - - 520
Amortisation of loan arrangement fees (159) (117) (246)
Increase in accrued loan interest (28) (17) 88
Non-cash movement in net debt (187) (134) (10,207)
Movement in net debt (excluding lease liabilities) (11,770) (29,896) (12,588)
Opening net debt (excluding lease liabilities) (66,567) (53,979) (53,979)
Closing net debt (excluding lease liabilities) (78,337) (83,875) (66,567)
Opening lease liabilities (94,011) (82,924) (82,924)
Capitalisation of new leases (24,363) (20,063) (32,277)
Disposal of lease liabilities 4,086 825 1,236
Interest element of lease repayments (2,136) (1,839) (4,060)
Cash outflow from lease repayments 12,557 12,479 24,014
Closing lease liabilities (103,867) (91,522) (94,011)
Closing net debt (including lease liabilities) (182,204) (175,397) (160,578)
9. Acquisitions
On 1 March 2025, the Group acquired the entire issued share capital of The
Union Motor Company Limited, an authorised repairer for London Electric
Vehicle Company (LEVC) based in Edinburgh. Total consideration of £370,000
(net of cash acquired) was settled from the Group's cash resources.
10. Retirement benefit asset
The Group operates a trust based defined benefit pension scheme, "Bristol
Street Pension Scheme", which has three defined benefit sections which were
closed to new entrants and future accrual on 31 May 2003, with another section
closed to new entrants in July 2003 and future accrual in October 2013. The
Group has applied IAS 19 (revised) to the scheme. The scheme remains fully
funded and in surplus on the accounting basis.
During the six month period ended 31 August 2025, there have been changes in
the financial and demographic assumptions underlying the calculation of the
liabilities. In particular, the discount rate has increased, inflation
assumptions have decreased and life expectancy assumptions have been modified.
The effect of these changes in assumptions was a decrease in liabilities of
£1,272,000. The liability hedging strategy within the scheme investment
portfolio meant that the period also saw a decrease in the market value of
scheme assets of £1,414,000. In total, an actuarial loss of £149,000 was
recognised in the Consolidated Statement of Comprehensive Income.
11. Cash flow from movement in working capital
The following table reconciles the movement in balance sheet headings to the
movement in working capital as presented in the Consolidated Cash Flow
Statement.
For the six months ended 31 August 2025
Trade and other receivables Trade and other payables Total working capital movement
Inventories
£'000 £'000 £'000 £'000
Trade and other payables (885,037)
Contract liabilities (20,291)
At 31 August 2025 789,781 93,880 (905,328)
At 28 February 2025 816,939 98,951 (960,729)
Balance sheet movement 27,158 5,071 (55,401)
Acquisitions 33 62 (252)
Movement excluding business combinations 27,191 5,133 (55,653) (23,329)
Pension related balances 98
Decrease in capital creditor 1,093
Decrease in interest accrual 500
Derivative financial instruments 9
Decrease in share buyback accrual 72
Decrease in loan acceptance fee accrual 334
Movement in working capital (21,223)
For the six months ended 31 August 2024
Trade and other receivables Trade and other payables Total working capital movement
Inventories
£'000 £'000 £'000 £'000
Trade and other payables (850,196)
Contract liabilities (21,618)
At 31 August 2024 785,718 86,897 (871,814)
At 29 February 2024 761,996 93,702 (893,407)
Balance sheet movement (23,722) 6,805 (21,593)
Acquisitions 734 48 (24)
Movement excluding business combinations (22,988) 6,853 (21,617) (37,752)
Pension related balances 85
Increase in capital creditor (1,039)
Increase in interest accrual (16)
Derivative financial instruments (127)
Movement in working capital (38,849)
For the year ended 28 February 2025
Trade and other receivables Trade and Total working capital movement
Inventories other
payables
£'000 £'000 £'000 £'000
Trade and other payables (940,541)
Contract liabilities (20,188)
At 28 February 2025 816,939 98,951 (960,729)
At 29 February 2024 761,996 93,702 (893,406)
Balance sheet movement (54,943) (5,249) 67,323
Acquisitions 16,017 2,082 (16,933)
Disposals - - (929)
Movement excluding business combinations (38,926) (3,167) 49,461 7,368
Pension related balances 173
Increase in capital creditor (22)
Decrease in interest accrual 169
Derivative financial instruments (282)
Increase in share buyback accrual (86)
Increase in loan acceptance fee accrual (334)
Movement in working capital 6,986
12. Goodwill and other indefinite life assets
31 August 31 August 28 February
2025 2024 2025
£'000 £'000 £'000
Goodwill 90,314 85,429 89,814
Other indefinite life assets - Franchise relationships 45,692 43,903 45,692
At end of period 136,006 129,332 135,506
13. Risks and uncertainties
There are certain risk factors which could result in the actual results of the
Group differing materially from expected results. These factors include:
failure to deliver on the strategic goal of the Group to acquire and
consolidate UK motor retail businesses, failure to meet competitive challenges
to our business model or sector, advances in vehicle technology providing
customers with mobility solutions which bypass the dealer network, inability
to maintain current high quality relationships with Manufacturer partners,
economic conditions impacting trading, market and environmental considerations
impact on vehicle supply and values, litigation and regulatory risk, failure
to comply with health and safety policy, failure to attract, develop and
retain talent, failure of Group information and telecommunication systems,
malicious cyber-attack, availability of credit and vehicle financing, use of
estimates, currency risk, impact of the transition to lower emission
alternatives, changes in cost base driven by climate goals and other climate
related physical risks.
All of the above principal risks are consistent with those detailed in the
Annual Report for the year ended 28 February 2025.
The Board continually review the risk factors which could impact on the Group
achieving its expected results and confirm that the above principal factors
will remain relevant for the final six months of the financial year ending 28
February 2026.
Set out below are the definitions and sources of various alternative
performance measures which are referred to throughout the Interim Financial
Report. All financial information provided is in respect of the Vertu Motors
plc Group.
Definitions
Like-for-like Dealerships that have
comparable trading periods in two consecutive financial years, only the
comparable period is measured as "like-for-like".
H1 FY26 The six month
period ended 31 August 2025.
H1 FY25 The six month
period ended 31 August 2024.
Adjusted Adjusted for
non-underlying items as these are unconnected with the ordinary business of
the Group. This definition has been amended during the year ended 28 February
2025 to exclude share-based payment charges and amortisation which were
previously included in non-underlying items. Share-based payments and
amortisation are included in underlying items in both the current and the
comparative period.
Aftersales gross margin Aftersales gross margin compares the gross
profit earned from aftersales activities to total aftersales revenues,
including internal revenue relating to service and vehicle preparation work
performed on the Group's own vehicles. This is to properly reflect the real
activity of the Group's aftersales departments.
Alternative Performance Measures
Adjusted Profit Before Tax (PBT)
Six months ended Six months ended
31 August 31 August
2025 2024
£'000 £'000
Profit before tax 19,537 22,067
Redundancy costs 325 -
Other site closure costs 144 -
Adjusted PBT 20,006 22,067
Free Cash Flow
Six months ended Six months ended
31 August 31 August
2025 2024
£'000 £'000
Net cash inflow from operating activities 15,965 312
Purchase of other property, plant and equipment (10,853) (11,953)
Enhancement capital expenditure included in above 2,455 7,174
Purchase of intangible assets - (19)
Proceeds from disposal of property, plant and equipment 3,253 800
Principal elements of lease repayments (10,421) (10,640)
Free Cash Flow 399 (14,326)
Tangible net assets per share
31 August 28 February
2025 2025
£'000 £'000
Net assets 363,972 357,551
Less:
Goodwill and other indefinite life assets (note 12) (136,006) (135,506)
Other intangible assets (1,294) (1,557)
Add:
Deferred tax on above adjustments 14,587 14,318
Tangible net assets 241,259 234,806
Tangible net assets per share 76.1p 72.9p
At 31 August 2025 there were 320,700,132 shares in issue (28 February 2025:
330,101,763) of which 3,784,108 were held by the Group's employee benefit
trust (28 February 2025: 7,793,005). Rights to dividends on shares held in
the Group's employee benefit must have been waived and, therefore, such shares
are not included in the tangible net assets per share calculation.
Like-for-like reconciliations:
Revenue by department
H1 FY26 H1 FY26
Group revenue Acquisitions Disposals revenue Like-for-like revenue £'m
£'m revenue £'m
£'m
New car retail and Motability 740.8 (41.2) (1.1) 698.5
New fleet and commercial 549.4 (3.0) (0.5) 545.9
Used vehicles 1,002.7 (57.3) (7.5) 937.9
Aftersales 217.1 (9.7) (0.6) 206.8
Total revenue 2,510.0 (111.2) (9.7) 2,389.1
H1 FY25 H1 FY25
Group revenue Acquisitions Disposals revenue Like-for-like revenue £'m
£'m revenue £'m
£'m
New car retail and Motability 771.8 (0.6) (1.8) 769.4
New fleet and commercial 545.5 (0.3) (0.9) 544.3
Used vehicles 950.6 (7.1) (19.2) 924.3
Aftersales 206.7 (0.4) (6.0) 200.3
Total revenue 2,474.6 (8.4) (27.9) 2,438.3
Gross profit by department
H1 FY26 H1 FY26
Group gross profit Acquisitions gross profit Disposals Like-for-like gross profit
£'m £'m gross profit £'m
£'m
New car retail and Motability 56.6 (2.9) (0.1) 53.6
New fleet and commercial 27.5 (0.5) - 27.0
Used vehicles 71.1 (3.2) (0.1) 67.8
Aftersales 127.0 (6.2) (0.3) 120.5
Total gross profit 282.2 (12.8) (0.5) 268.9
H1 FY25 H1 FY25
Group gross profit Acquisitions gross profit Disposals Like-for-like gross profit
£'m £'m gross profit £'m
£'m
New car retail and Motability 58.4 - (0.4) 58.0
New fleet and commercial 28.2 - - 28.2
Used vehicles 68.7 (0.5) (1.0) 67.2
Aftersales 118.5 (0.4) (1.6) 116.5
Total gross profit 273.8 (0.9) (3.0) 269.9
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