REG - Vertu Motors PLC - Final results for the year ended 28 February 2026
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RNS Number : 0555E Vertu Motors PLC 13 May 2026
13 May 2026
Vertu Motors plc ('Vertu', 'Group')
Final results for the year ended 28 February 2026
Strong aftersales profits; robust asset backing; positive current trading
Vertu Motors plc, the major UK automotive retailer with a network of 191 sales
and aftersales outlets, announces its final results for the year ended 28
February 2026 ('Year').
Commenting on the results, Robert Forrester, Chief Executive Officer, said:
"The Group has delivered solid results against the backdrop of sector
pressures from the Government's ZEV mandate on new car profitability, as we
have focused on controlling the controllables, such as aftersales and cost.
The Group is benefiting from stable management, a highly trained and
committed workforce, strong cashflows funding a maintained dividend, another
£12m share buyback and significant asset backing. The Group is therefore
excellently positioned to take advantage of the inevitable opportunities that
will arise as the sector continues to consolidate. I am delighted that the
trading performance in March and April has been strong and ahead of the prior
year period, which is a testament to the quality and hard work of the
excellent Vertu team, whom I would like to thank."
FINANCIAL SUMMARY
Years ended 28 February 2026 2025
Revenue £4,833.8m £4,763.9m
Adjusted(1) profit before tax £24.5m £29.3m
Non-underlying items £4.2m £4.6m
Profit before tax £20.3m £24.8m
Basic Adjusted(1) EPS 5.71p 6.58p
Dividends per share 2.05p 2.05p
Free Cash Flow £30.7m £37.3m
Net Debt(2) £61.3m £66.6m
HIGHLIGHTS
· Adjusted(1) profit before tax of £24.5m ahead of market
expectations(3) delivered despite weak new vehicle markets due to the
Government's Zero Emission Mandate (ZEV) and related margin pressure.
· £3.4m of insurance proceeds recognised as other income in FY26 in
underlying earnings offsetting losses from the JLR cyber-attack of £3.9m.
· Aftersales delivered strong growth, with like‑for‑like revenue
and gross profit growth, now generating over 46% of Group gross profit and
underpinning earnings resilience.
· Modest used car volume growth, with pricing stability and stable
gross profit per unit.
· Disciplined cost control, with Core Group(4) operating costs up just
1.1% year‑on‑year despite wage inflation, and a further £10m cost
efficiency programme delivered to aid FY27 results.
· Robust cash generation, with £30.7m of free cash flow,
bolstering an already strong balance sheet.
· Net debt(2) of £61.3m as at 28 February 2026 (FY25: Net debt:
£66.6m).
· Capital returns maintained, with final dividend of 1.15p per share
recommended holding full‑year dividend flat at 2.05p per share (FY25: 2.05p)
and £10.7m returned through share buybacks during the year. A total of
£46.5m expended on the repurchase of over 21% of the Group's issued shares
since the programmes began in FY18. Further £12m share buyback programme
announced in March.
· Non-underlying costs of £5.1m arose as a result of dealership
closures and restructuring costs to reduce the cost base of the Group. This
is offset by £0.9m of non-underlying income relating to profit on disposal of
surplus freehold properties and disposal of businesses.
· Surplus freehold property disposals generated cash proceeds of £5.1m
and were sold at an aggregate £0.6m premium to book value in FY26. FY27 has
already seen surplus property disposals of £1.5m at a premium to book value
of £0.5m. Glasgow disposal, announced in Pre-close Trading update as expected
to complete in March is delayed.
· Net tangible assets per share of 75.9p (FY25: 72.9p)
· Group awarded 2025 Retailer of the Year and Customer Experience
award by Autotrader.
· Programme to enhance portfolio with new Chinese entrant brands
implemented and set to continue: Jaecoo, Omoda, Lepas, Chery and Leapmotor to
be added to portfolio.
CURRENT TRADING AND OUTLOOK
· Strong start to FY27, trading profit for March and April 2026 was
ahead of the prior year.
· The Group's resilient Aftersales operations delivered record
performance and a £2.9m uplift in Core Group gross profit in March and April
compared to the prior year period.
· On 1 April the Group launched Value Cars by Vertu, an initiative to
increase market share in the 7-to-14-year-old used car market. Initial
indications are that this will add incremental profits.
· The ZEV mandate is distorting volumes, margins and channel mix for new
car and commercial vehicles, alongside elevated discounting and potential
non‑BEV supply constraints. The ratcheting of targets creates more intense
pressure and the Group has asked the Government to urgently bring forward its
review of the ZEV mandate from 2027 to 2026.
· The impact of the Middle East conflict driving fuel price volatility,
pressuring consumer confidence, disposable income and vehicle demand is being
monitored. No material adverse consumer trends are visible today. BEV and
hybrid vehicles are showing higher interest from customers as expected. A
prolonged conflict could drive up inflation.
· Group remains well positioned, with scale advantages, disciplined
execution and a strong financial position to navigate structural market
adjustment and capture opportunities.
(1) Adjusted to remove non-underlying items
(2) Excludes lease liabilities, includes used vehicle stocking loans
(3) According to compiled data at 30 April 2026, the current consensus of
three sell side analysts' expectations for FY26 adjusted profit before tax is
£24.0m with a range of £23.4m to £24.4m.
(4) Core Group represents dealerships that have traded for the full period
from 1 March 2024.
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
Robert Forrester, CEO Tel: 0191 491 2121
Karen Anderson, CFO Tel: 0191 491 2121
Phil Clark, Investor Relations PClark@vertumotors.com
Stifel (Nominated Advisor and Broker)
Matthew Blawat Tel: 0207 710 7688
Callum Stewart
Shore Capital (Joint Broker)
Mark Percy/Sophie Collins (Corporate Advisory) Tel: 0207 408 4090
Isobel Jones (Corporate Broking)
Blackdown Partners (Corporate Finance Advisor)
Peter Tracey Tel: +44 (0) 754 995 4255
Tom Fryson
Camarco
Billy Clegg Tel: 020 3757 4980
Tom Huddart
Letaba Rimell
CHAIRMAN'S STATEMENT
The Group demonstrated resilience and strong operational discipline during the
year ended 28 February 2026, navigating a highly challenging period for the UK
automotive sector. Adjusted(1) profit before tax of £24.5m was slightly
ahead of market expectations(2), reflecting effective execution against a
backdrop of continuing regulatory disruption leading to weak new vehicle
retail conditions and margin pressure. The cyber-attack on Jaguar Land Rover
('JLR') also impacted the Group's operations in the second half.
New vehicle market conditions were heavily influenced by the Government's ZEV
mandate, which continued to distort Manufacturer behaviour, suppress retail
margins and shift volume into lower‑return channels. Consumer and business
confidence also remained subdued generally. The Board is also mindful of wider
geopolitical risks, including ongoing instability in the Middle East, which
could increase energy price volatility and further pressure consumer
confidence and household disposable income.
From September onwards, the Group's operations were impacted by the
cyber‑attack at JLR, which temporarily disrupted vehicle supply and
aftersales activity across the JLR network. Management responded decisively
to mitigate the financial impact and maintain operational continuity. The
Group recovered a substantial amount of the losses incurred through receipts
from its insurance policy, which have been recognised in the Year.
Against this backdrop, the Group focused on what it could control.
Aftersales delivered a strong performance, disciplined cost actions were
implemented, and robust cash generation was achieved, underpinning a strong
balance sheet. Gearing is low at 17% and this provides the Board with
comfort as to the resilience of the Group in an uncertain market.
The Group continued to execute its growth strategy through selective
acquisitions and portfolio development, including further expansion with
fast‑growing Chinese Manufacturers.
Active portfolio management also resulted in continued trends for the disposal
of surplus property assets at a premium to book value. This reflects the
conservative nature of the Group's property book values which underpin
tangible asset values.
In April 2025, the Group completed its transition to operating under a single
retail brand, Vertu. This simplification has been well received by
Manufacturers and customers and is expected to deliver marketing efficiencies
and operational benefits in FY27. Alongside this, the Group continued to
invest in proprietary systems and digital capability, improving efficiency,
customer experience and scalability.
Capital allocation remains a core Board priority. Strong cash generation
enabled continued investment in the business alongside delivering shareholder
return strategies, including dividends and share buybacks. Since the
commencement of the buyback programme in 2018, over £46.5m has been returned
to shareholders through these programmes with over 21% of issued shares now
repurchased. The Board was pleased to announce another £12m share buyback
programme in March 2026.
The Board also benefited from continued strength and stability in governance
and leadership. The experience and commitment of the executive team,
supported by a strong and well‑balanced Board, positions the Group well to
navigate ongoing structural change in the automotive sector. The Group was
founded 20 years ago as an AIM-Listed cash shell flotation. It has grown its
asset base and scale of operations consistently with 19 years of continuous
profitability.
The Group is very well positioned from a management, financial capacity and
Manufacturer relationship standpoint to undertake further substantial growth
as opportunities arise.
Finally, I would like to thank our more than 7,200 colleagues for their
professionalism, resilience and dedication throughout a demanding year.
Their commitment remains fundamental to the Group's long‑term success.
Andy Goss, Chairman
(1) Adjusted to remove non-underlying items
(2) According to compiled data at 30 April 2026, the current consensus of
three sell side analysts' expectations for FY26 adjusted profit before tax is
£24.0m with a range of £23.4m to £24.4m.
CHIEF EXECUTIVE'S REVIEW
Overview
The Group's key long-term strategic goal is: To deliver growing, sustainable
cashflows from operational excellence in the automotive retail sector. The
strategic objectives of the Group, are summarised below:
· To grow as a major scaled franchised dealership group and to develop
our portfolio of Manufacturer partners, while being mindful of industry
development trends, to maximise long-run return.
· To be at the forefront of digitalisation in the sector, delivering a
cohesive 'bricks and clicks' strategy, together with a focus on cost
optimisation and efficiency.
· To develop and motivate the Group's colleagues to ensure operational
excellence is delivered constantly across the business.
Within a most challenging year for the sector, the Group focused on what it
could control and on delivery of these long-term strategic goals. Aftersales
delivered strong growth and margin expansion, portfolio rebalancing progressed
and decisive cost actions were taken to mitigate structural cost pressures.
These actions underpinned robust cash generation and a strong balance sheet,
positioning the Group well entering the new financial year.
The Group continues to drive productivity through technology, supported by a
significant in-house development team spanning systems integration,
automation, digital products and emerging AI use cases.
Market Dynamics and Structural Shifts
The UK automotive market in FY26 remained heavily shaped by regulatory
intervention rather than underlying consumer demand. The UK retains one of the
most ambitious BEV transition trajectories among major automotive markets,
with Manufacturers of cars required to achieve a 28% BEV mix in 2025 and 33%
in 2026, facing fines of £12,000 per vehicle for non-compliance. Future
targets ratchet up significantly to an 80% mix in 2030. BEVs accounted for
only 23.4% of car registrations in 2025, achieved largely through financially
unsustainable Manufacturer discounting. The SMMT highlight that current
market conditions differ materially from those assumed when the mandate was
set out, battery, industrial energy and public charging costs are all
significantly higher than was then anticipated. The SMMT estimates
discounting of BEV vehicles exceeded £5 billion in 2025 (at least £11,000
per BEV), distorting both new and used car markets and creating sustained
margin pressure across the sector. By the end of April 2026, BEV share stood
at 23.1% calendar year to date, leaving uptake short of the 33% share
required.
Subdued business confidence and economic headwinds, together with very
aspirational targets under the ZEV mandate for light commercial vehicles
contributed to an 8.6% reduction in registrations of light commercial vehicles
('LCV') in the UK in the Year. Change cycles have been extended,
particularly in the 2.0 to 2.5 tonne small van category which showed an 18.4%
market decline. There are several structural challenges to wider electric
LCV adoption in the UK that are more acute than for cars. Charging
infrastructure limitations, payload limitations, residual value concerns of
major funders and affordability concerns are all limiting BEV adoption in the
van market. A separate ZEV mandate applies to LCV in the UK, with a target
BEV mix in 2026 of 24% against an actual UK LCV registration BEV mix of 9.4%
in 2025. BEV registrations to April calendar year to date remained at the
same level with no growth. The fines for missing the mandated targets on
vans are £15,000 per van, which is above the £12,000 fine for cars. The ZEV
mandate looks certain to continue to disrupt the LCV market significantly in
the coming periods as Manufacturers seek to avoid fines.
The LCV market was also impacted by taxation changes for double cab pickups.
In April 2025 such vehicles were reclassified as 'cars' rather than 'vans' in
terms of their taxation treatment, becoming substantially more expensive to
operate as company vehicles due to higher benefits in kind, reduced capital
allowances and higher applicable Employers' National Insurance costs.
Overall, fewer pickups were registered in the Year because of this change,
despite a significant spike in registrations in March 2025 as users bought
ahead of the tax changes.
A further structural shift in the UK market has been the rapid growth of
Chinese Original Equipment Manufacturers ('OEMs'). New Chinese(3) brands have
increased UK market share at pace with a 5.5% share in 2025 (2024: 0.7%)
supported by competitive pricing, strong technology propositions and an
ability to supply both pure BEV and hybrid powertrains at scale. As Chinese
vehicle production increasingly exceeds domestic demand and with Chinese
factories running far below capacity, the UK has become a strategically
attractive export market, particularly given the absence of significant
tariffs on Chinese EV imports in contrast to other key markets. This has
intensified competition across key segments, accelerated price pressure on
other Manufacturers and contributed to the erosion of traditional brand
loyalty. While Chinese brands remain relatively immature from an aftersales
perspective and therefore currently generate lower returns, their growing
presence represents a material and likely lasting change to the UK automotive
landscape. The Group is working with a number of these new Manufacturers to
grow its share of sales outlets operated.
During the Year, the Government confirmed changes to the Motability Scheme,
which will take effect from 1 July 2026. These measures removed some
long‑standing tax exemptions and increase the cost of operating the Scheme.
Motability also removed access to the Scheme for certain premium
Manufacturer brands such as Audi, BMW and Mercedes from the end of 2025.
These brands represented 4.7% of the Scheme in 2025. Existing leases are not
affected, and eligibility for the Scheme remains unchanged. The Motability
Scheme continues to play an important role in supporting customers with
mobility and independence needs. The Group's position as the programme's
largest retailer, managing over 50,700 vehicles, provides a resilient and
recurring source of aftersales revenue, as each vehicle requires an annual
service funded by Motability throughout the lease period.
(3) Source: SMMT, includes BYD, Jaecoo, Omoda, Chery, Leapmotor, Xpeng, GWM,
Geely and Changan.
Financial Conduct Authority: Motor Finance Redress
On 30 March 2026 the Financial Conduct Authority published the details of its
Motor Finance Commission Redress Scheme ('Scheme'). This is an industry wide
scheme to address historic unfairness in motor finance in the period from
April 2007 to November 2024. This followed a consultation process that began
in October 2025 and which the Group took an active part in.
The Scheme requires lenders to pay redress to consumers if the finance
contracts they entered into meet specific detailed criteria. The FCA
estimate that circa 12 million agreements will meet the criteria for
redress. There is a 3-month period for lenders to prepare their systems and
procedures in order to identify the agreements that are in scope.
The Group acts as credit brokers for the lenders and we will have been
involved in broking agreements that will qualify for redress. The Group's
responsibilities as brokers are explicitly detailed in the FCA scheme rules.
These are limited in the Scheme to providing the lenders with information they
may ask us for in order to determine if a particular consumer agreement
qualifies for redress. Extensive preparatory work has already been carried
out on Group data in this area so that information can be provided to lenders
within the one-month timescale defined by the Scheme. The Group is currently
working with lenders to understand the data they require and intend to provide
that in a bulk data share wherever possible. Given the scale of the Scheme
the Group may need to invest in additional resource to meet this regulatory
requirement.
The expected sums of the redress scheme as a whole are substantial and
estimated by the FCA at c. £9bn for the UK. One financial institution
(covering 10% of the used car finance market) has expressed its intention to
exit the market as a result of the impact of the redress scheme. Others have
already exited. There is a risk that the market for consumer finance will
contract in the future given the retrospective regulatory actions and this may
lead to increased costs to consumers and reduce the Group's income as a credit
broker in the future.
On 1 May 2026 the FCA confirmed the Scheme has been formally challenged by one
claims management company and three lenders. The Scheme will now be referred
to the Upper Tribunal, where it will be subject to a further Judge led
review. The Scheme has therefore been postponed.
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 should
that position change.
Group Operational Performance
New Vehicles
The Group's new vehicle profitability declined significantly for a second
consecutive year. Reduced Motability volumes, weaker retail margins driven
by increased upfront discounting, and lower Manufacturer support contributed
to a reduction in Core Group new vehicle gross profit compared to the prior
year of £8.7m. Over the last 24 months, Core Group new retail vehicle
departmental gross profit has declined by £19.6m putting significant pressure
on Group profitability. While like‑for‑like new retail sales volumes
increased modestly, this lagged the wider market, which was supported by
elevated pre‑registration activity.
Despite these headwinds, Core Group new car gross margin percentages improved
slightly, reflecting a more favourable sales mix as Motability volumes reduced
and the Group saw increased activity under agency arrangements where the Group
receives a handling fee. Group like‑for‑like BEV new retail volumes
increased 71.0% compared to FY25, representing a meaningful outperformance,
compared to the UK private BEV market which grew 50.2%.
Fleet and commercial gross profit in the Core Group declined £4.2m compared
to the prior year. Reduced LCV volumes, driven by the weaker market for the
commercial vehicles in the UK, the impact of the JLR cyber-attack and reduced
margins all had an effect on Group profitability in this segment.
Aftersales
The UK market for aftersales is benefitting from the highest number of cars
and vans on the road in UK history. Aftersales once again demonstrated its
importance to the Group's earnings resilience. Like‑for‑like aftersales
gross profit and revenues increased across all major channels, supported by
strong customer retention, good technician availability, an increase in
internal rates charged to the vehicle departments in preparing vehicles for
sale and effective operational execution. Group initiatives such as Pay
Later (where additional work identified and sold can be paid for over a number
of months) continued to enhance conversion of identified repairs at strong
margins.
With approximately 160,000 live service plans and more than 50,700 Motability
vehicles under contract, the Group has a highly resilient aftersales revenue
base. Aftersales generates over 46% of total Group gross profit and remains
a core pillar of profitability and cash generation, supported by continued
strategic development across service, parts and repair operations.
Used Vehicles
The UK used vehicle market was resilient in 2025, growing 2.2% year-on-year in
terms of number of transactions. However, demand was uneven by age bracket,
with older vehicles attracting stronger interest reflecting affordability and
value-seeking behaviour by consumers. Used vehicle supply remained a
structural constraint in the market throughout 2025, as the lingering impact
of post-pandemic new car shortages continued to suppress the availability of
3-5-year-old used vehicles - a core market for franchised dealerships.
Wholesale prices of used vehicles have been resilient and have remained
broadly stable throughout the year. Retail and wholesale pricing came under
pressure in nearly new vehicles, where prices were constrained by both heavy
Manufacturer discounting of new vehicles and more muted consumer demand. This
resulted in margin pressure in younger used cars offset by stronger margins in
older cars.
From April 2026, the Group has rolled out a new initiative focused on the
retailing of used vehicles in the 7-14-year-old range, opening a new segment
leveraging the Vertu brand, distribution and data expertise in used vehicle
pricing. Value Cars by Vertu reflects changing customer affordability dynamics
and value‑seeking behaviour in the UK used car market, driving this segment
to be the strongest part of the current used car market. This initiative has
the potential to enhance volumes, margins and overall profits for the Group.
Management
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 were created with internal promotions from Group Operations Directors to
Managing Directors, effective from 1 January 2026. Leon Caruso and Anthony
Masterson were previously 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 now oversee Group
dealership operations providing resource and dedication to maximise focus.
This has reduced the CEO's span of control and enabled me as CEO to
concentrate on Manufacturer relationships, the execution of Group strategy and
to spend more time in the Group's dealerships and operations.
To provide additional focus on the Group's substantial and profitable parts
business, a further internal appointment into a newly created role of Group
Parts Director was made on 1 September 2025. Since appointment, Gregor
Mackie has developed a clear growth strategy for the Group's parts operations,
strengthening commercial focus and operational alignment across wholesale,
retail and internal channels. A key element of this strategy is the
implementation of an after‑market parts solution to support the servicing
and preparation of older vehicles. This initiative is designed to capture
sales previously lost where Manufacturer parts are priced above what customers
are willing to pay, ensuring the Group can offer competitively priced repair
options without compromising quality. The development of this after‑market
offering complements the Group's increasing focus on retailing older used
vehicles, broadening customer appeal and supporting margin resilience across
the aftersales and used vehicle operations.
Cost Discipline
The Group completed the transition to a single retail brand, Vertu, across all
dealerships. This strategic consolidation is expected to deliver material
marketing efficiencies and operational benefits.
In parallel, the Group undertook decisive cost actions to mitigate rising
structural cost pressures and the impact of reduced new vehicle profitability.
Management implemented a comprehensive cost reduction programme for the
second consecutive year in late 2025 and early 2026, focused on areas within
the Group's control, including headcount rationalisation, selective dealership
closures where return hurdles were not being met, and tighter control of
discretionary expenditure. These actions were complemented by continued
investment in automation and process efficiency and are expected to save £10m
of annualised cost going forward.
Digitalisation Developments
The Group's 60-strong in-house development team continues to drive
digitalisation across the business, enhancing the customer proposition,
improving operational efficiency and supporting profitability. This in-house
capability enables the Group to rapidly design, develop and deploy proprietary
systems while maintaining tight control of cost, data and intellectual
property, increasingly positioning the Group as one of the most
technologically advanced automotive retailers in the UK.
Investment in systems and operational development enables the Group to
standardise processes, strengthen controls and access real-time management
information, supporting faster and more informed decision-making across the
business.
These initiatives form part of a broader multi-year programme to modernise the
Group's digital platforms, data infrastructure and operational processes.
The following highlights some of the key areas of digitalisation progress
delivered in the Year:
· Artificial Intelligence Adoption and Digital Productivity
The Group continues to explore the practical application of Artificial
Intelligence ('AI') and advanced digital tools to improve productivity,
enhance customer engagement and support operational efficiency. The focus
remains on targeted deployments where clear business benefit and return on
investment can be materially demonstrated. Great care is being taken to
ensure the application of such technologies is secure and appropriate.
During the Year, AI-driven call analysis technology was successfully rolled
out across the Group's central contact centre operations. All phone and
internet enquiries for all outlets are handled by these centres based in
Gateshead, North East England for sales and service. The technology
automatically reviews and summarises customer calls, providing improved
management insight into call quality, customer needs and training
opportunities for colleagues. This deployment significantly reduces the
manual effort previously required to monitor calls while enabling more
consistent quality assurance across customer interactions.
Alongside this development, AI-driven voicemail services have been introduced
which automatically transcribe and categorise customer messages before routing
them to the appropriate teams for follow-up. This functionality improves
response times for customers while reducing administrative workload.
Building on the availability of AI-generated call transcripts and the Group's
extensive operational data, new analytical models are also being developed to
further enhance both customer experience and regulatory compliance. These
include propensity models to better understand customer behaviour and risk
models designed to identify potential indicators of vulnerability in line with
FCA requirements and the Consumer Duty framework. These models combine
customer interaction transcripts with historical sales and operational data to
provide improved insight into customer journeys and support colleagues in
delivering appropriate customer outcomes. The AI insights are used to help
script and direct the next contact point for the customer such as bespoke
scripting of the next sales call in the sales process. The capability
entered pilot in April 2026 and is currently being tested across 16 dealership
locations within the Group.
Within the Group's in-house development function, new development tools
incorporating AI capabilities are being tested. This area of AI is
particularly fast moving. These tools assist engineers with elements of
coding, documentation and testing, enabling development teams to deliver
system enhancements more efficiently and focus their time on higher-value
engineering tasks.
The Board believes that the measured deployment of AI across customer contact
handling, internal knowledge management and software development processes
will continue to improve productivity and support the Group's operational
efficiency going forward.
· Website Re-Platforming and Digital Presence
Following the transition to a single retail brand 'Vertu', the Group commenced
a full rebuild of its core retail website platform. This modular programme,
delivered entirely by the Group's in-house development team, continues to
progress well and remains on track for completion in mid-2026. Modular
changes to date have increased search engine optimisation visibility and
effectiveness and increased website conversion. The Group was awarded 2025
Autotrader 'retailer of the year' and customer experience award, reflecting
the strong focus on digital customer experience.
Alongside the re-platforming programme, the Group has continued to strengthen
its Search Engine Optimisation ("SEO") capability. Visibility across key
automotive search terms has improved significantly during the Year and the
Group now consistently ranks first amongst automotive retail peers across a
broad range of priority search categories. Visibility of the Vertu Motors
website has increased from 4% to a sector leading level of over 18% over the
Year.
The Group has also identified the growing importance of video content and
YouTube channels as search behaviour evolves, particularly as AI-driven search
becomes more prevalent. Work is underway to expand the Group's video content
capability as part of its broader digital marketing strategy and the Group has
seen some early successes in this area.
· Customer Data Platform ("CDP")
The Group continues to strengthen how it uses customer information stored in
its Customer Data Platform ("CDP"), to support enhanced CRM with more
effective marketing and improved customer engagement. During the year,
changes were made to better connect customer communications and data, helping
the Group teams work more efficiently and tailor messages more effectively.
These improvements supported increased customer contact activity and
contributed to record levels of online and outbound service bookings in
January and February 2026. Overall, the Group is using customer insight more
effectively to support better decision‑making and enhance the customer
experience.
The Group continues to develop new CDP use cases, leveraging this platform to
improve marketing effectiveness, optimise customer journeys and support better
decision-making.
· Finance Efficiency Through Automation
The Group has made significant strides in automating finance and
administrative processes, reinforcing our commitment to boosting productivity
and driving down operating costs, whilst enhancing the quality and usefulness
of its financial data.
Over the Year, we successfully introduced automated invoicing within Vertu
Cosmetic Repair operations. This advancement now enables the automatic
generation of around 21,500 sales ledger invoices each year, alongside
seamlessly posting costs against more than 100,000 vehicle records annually.
Not only does this system streamline the invoicing process, but it also
manages the related intercompany payments without any manual intervention.
An enhanced Aftersales Dashboard has been rolled out across the Group's
service departments. By integrating advanced payment technologies, including
Open Banking, the dashboard has expanded the range of payment options
available to customers. This move does not just enhance customer convenience
but also results in notable transaction cost savings compared to traditional
card processing methods.
Furthermore, the Aftersales Dashboard now automates the recording of nearly
500,000 receipt transactions into the Group's accounting system each year,
virtually eliminating the need for manual data entry, reducing the risk of
manual error and significantly improving operational efficiency.
Collectively, these automation initiatives have already produced substantial
cost savings by reducing administrative workloads and transaction expenses.
The Board remains confident that, as the Group continues to identify and
implement further automation opportunities across the finance operations, this
will unlock even greater control improvements, productivity gains and
operational efficiencies.
Work has recently begun on using several AI tools to build an in-house
"invoice to pay" system that will handle invoice recognition and
authorisation. This initiative is expected to provide the next dimensional
shift in the Group's finance function and will be delivered in FY27.
Developing the scale of the Group
The Board continued to actively manage the Group's dealership and property
portfolio with disciplined capital allocation and a focus on long‑term
returns. Actions undertaken since 1 March 2025 reflect a strategy to reshape
the Group's Manufacturer representation, expanding presence with
fast‑growing new entrants, and enhance overall portfolio performance through
both investment and rationalisation activities:
Franchising developments and new brand representation
During the Year, the Group advanced its strategy to strengthen representation
with Chinese Manufacturers expected to gain share in the UK market:
· The Group commenced its presence with the Chinese brand, BYD, in
the year ended 28 February 2025, with two outlets opening in Worcester and
Gloucester. The Group continued to review further opportunities with the BYD
franchise and as a result, opened three new BYD sales outlets in the Year.
Hartlepool and Macclesfield opened in former Ford outlets and Morpeth opened
alongside Ford and Honda. This increased the number of BYD outlets in the
Group to five.
· The Group opened its first Geely outlet in Glasgow in February
2026, converting an existing freehold Ford dealership, with two further
outlets now operating in Glasgow and Birmingham and with Teesside planned to
open in FY27.
· The Group intends to introduce further Chinese brands such as
Leapmotor, Jaecoo, Omoda, Lepas and Chery into the Group's portfolio in the
coming months.
Other franchising activity during the Year included:
· The opening of a Nissan sales outlet in July 2025, in the Group's
MotorNation site in Tamworth.
· The launch of the Skoda franchise in Nottingham in November 2025
in the Group's former Citroen sales outlet in the city.
· On 1 November 2025 the Group acquired from Marshalls Motor
Company Limited, the trade and assets of Leicester Skoda for £0.6m, including
a payment in respect of goodwill of £50k. The outlet continues to operate
from leasehold premises acquired. This acquisition brought the total number
of Skoda outlets operated by the Group to five. The Group now has a strong
Skoda presence in the East Midlands covering Derby, Nottingham and Leicester.
· On 1 March 2025, the Group acquired The Union Motor Company Limited,
an authorised repairer for London Electric Vehicle Company (LEVC) based in
Edinburgh. Consideration for this acquisition was £0.4m (net of cash
acquired), including a £0.5m payment in respect of goodwill. This
acquisition aligns with the Group's strategy to grow its ancillary businesses
reinforcing its Taxi Centre operations. Taxi Centre operates the LEVC sales
franchise in Scotland and this transaction now means the Group provides a
unified sales and aftersales service in Scotland. The business has performed
very well since acquisition and has been fully integrated into the Group.
Active Portfolio Management
Following a strategic review of returns, the Group decided to exit several
businesses in the Year.
· The Group discontinued the Peugeot franchise from its Edinburgh
dealership in May 2025; the location continues to operate the MG and Kia
brands.
· In August 2025, the Group's final MotorNation used car sales
outlet was closed. The outlet operated from a freehold site in Derby which
also operates separate Nissan, Renault, Dacia, Peugeot and Skoda sales
outlets. The closure improved the used car and aftersales capacity of the
remaining franchised sales outlets on the site.
· In October 2025, the Group closed the Honda Motorcycles sales
outlet in Nottingham. The site continues to represent the Honda Car
franchise and an additional new franchise will be added in due course.
· In January 2026, the Group ceased Honda operations from Bradford,
with the dealership becoming solus Kia and with an agreement to bring the Kia
commercial vehicles (PBV) franchise to the Group for the first time.
· On 20 February 2026, the Group completed the sale of the Group's
Honda dealership in Huddersfield to Riverside Motors, generating cash proceeds
of £1.0m. This included a receipt in respect of goodwill of £0.4m and
generated a profit on disposal compared to book value of £0.3m. The
dealership was a leased property. This disposal was undertaken in coordination
with the closure of Bradford Honda.
· Finally, in February 2026, the Group closed its Volvo and Peugeot
sales outlets in Barnstaple and Launceston Peugeot. The freehold property at
Barnstaple was very swiftly sold in March 2026 for £1.5m being £0.5m above
book value. This profit will be treated as a non-underlying item in FY27 and
again shows the conservative nature of Group property values stated as they
are at depreciated historical cost.
Such active portfolio management has led to the Group generating surplus
freehold properties for resale. On 1 March 2025 the Group held five surplus
properties for resale, with a net book value of £7.9m. Disposals of four of
these properties were completed in the financial year, generating total cash
proceeds of £5.1m, 13% above net book value of the properties.
The sale of the final property, being surplus land held in Glasgow with
residential planning permission, was exchanged during the Year; however,
contractual completion, expected in March 2026 has not occurred. The Group
is actively considering its legal options in relation to the transaction
however, it is possible that the property will be remarketed for sale in FY27.
Strategic Positioning and Competitive Advantages
The Group's strategy is focused on building a resilient, scaled automotive
retail platform capable of generating sustainable cashflows through market
cycles. This Group is very well positioned to achieve this:
· Scale remains a core competitive advantage. The Group's national
footprint supports investment in proprietary systems, data and digital
capability that smaller operators cannot replicate. Platforms such as the
Customer Data Platform, Vertu Insights (the Group's proprietary used vehicle
pricing tool), the Group's internal vehicle auction and Vertu Transfer System
(allowing the seamless transfer of vehicles between Group sites) enhance
pricing discipline, inventory efficiency, marketing effectiveness and working
capital management, while enabling rapid integration of acquisitions.
· The strength of the Group's aftersales operations further
differentiates the business. A large vehicle parc, underpinned by service
plans and Motability contracts, provides a recurring revenue base that
stabilises earnings and cash generation when new vehicle profitability is
under pressure.
· The Group has a strong cohort of management and colleagues aided by
significant investment in training and development. Colleague engagement and
satisfaction scores are at very high levels.
· Customer experience scores are significantly above sector averages
and this is reflected in the Group being awarded in 2025 the Autotrader
Retailer award for customer experience.
· The Vertu brand is now in place across the UK and gaining in brand
awareness significantly in its first full year across the Group.
These attributes, combined with disciplined capital allocation and cost
control, position the Group well to navigate ongoing structural change in the
UK automotive market. The Group is ambitious to take advantage of
opportunities that will arise.
CURRENT TRADING AND OUTLOOK
March and April 2026 Trading (the 'Period')
The Board is pleased to report a strong trading performance for the Group
during the first two months of the new financial year, including the plate
change month of March. Trading profit for March and April 2026 was ahead of
the prior year.
The UK new car market returned to growth in 2026, with private registrations
increasing by 12.9% in March and April. Over 70% of this growth was driven
by Chinese OEM registrations, with their market share rising to 11.5% from
3.5% in the prior year period. It is likely a portion of this growth is the
conversion of previous used car customers into affordable new Chinese-made
cars. Against this backdrop, the Group delivered like-for-like retail new
vehicle volume growth of 6.5%. UK Motability registrations increased by
4.7%, reflecting weak comparatives and the timing of scheme change cycles.
The Group delivered like-for-like Motability volume growth of 5.3% growing
market share. Gross profit per unit on new retail and Motability vehicles in
the Core Group was slightly below the prior year. Nevertheless, the increase
in volumes drove an improvement in Core Group profit from new vehicle retail
and Motability sales of £1.0m year-on-year.
The Group's Fleet car operation delivered volume growth of 32.0%,
significantly outperforming the wider UK fleet car market, which grew by 10.7%
in the Period. Core Group commercial vehicle volumes increased by 8.5%,
despite a 0.5% decline in UK light commercial vehicle registrations, resulting
in market share gains. Notwithstanding this volume outperformance, Core
Group gross profit in the fleet and commercial department declined by £0.4m
year-on-year due to reduced margins of 4.6% (prior year period: 5.3%) arising
from the mix of sales delivered.
The UK used vehicle market remained stable, with consistent consumer demand
and pricing. The Group experienced a modest like-for-like decline in used
vehicle volumes of 0.2%, partly reflecting customer migration into new car
purchases due to enhanced Manufacturer offers on new vehicles. Used vehicle
gross margins were stable; consequently, Core Group used vehicle gross profit
was £0.3m below the prior year.
The Group's resilient, high margin aftersales channels delivered a strong
like-for-like gross profit increase of £2.9m year-on-year. Core Group
service revenues increased by 4.5%, reflecting an additional working day
compared to the prior year period, strong customer retention, good technician
availability and effective operational execution.
Core Group operating expenses were broadly flat year-on-year, with cost
savings delivered through restructuring programmes offsetting inflationary
pressures. The cash payment in respect of business interruption insurance
settlement was received in May.
Outlook
The Board is encouraged by the Group's strong start to FY27, which supports
confidence in delivering market expectations for the financial year despite
continued sector and macro-economic headwinds.
Manufacturers of new vehicles in the UK continue to face a challenging task in
managing volumes and powertrain mix as the ZEV mandates accelerate ahead of
underlying demand for BEVs, both car and vans. Elevated discounting and
incentive activity remain necessary to drive compliance, placing sustained
pressure on industry profitability. These distortions are expected to
intensify in the year ahead, with ongoing implications for volumes, margins
and channel mix.
In addition, the Board continues to monitor geopolitical developments,
including the impact of the prolonged conflict in the Middle East. The
disruption to global energy supply has the potential to drive fuel price
volatility, and further pressure consumer confidence, disposable income and
vehicle demand. In this context, the Deloitte Consumer Tracker published in
mid-April showed overall UK consumer confidence has fallen to its lowest level
since 2023. Notwithstanding this, no material adverse consumer trends are as
yet visible in the Group's trading. BEV and hybrid vehicles are showing
higher interest from customers as expected with higher fuel prices. The
Group is impacted by higher oil prices in terms of oil sold to customers
(which the Group intends to seek to pass on to customers) and fuel and energy
costs. Whilst the latter is substantially hedged for FY27, overall exposure at
current energy and fuel prices is c. £1m.
The Group will continue to control the controllables and has responded
proactively to those headwinds where possible. Aftersales continues to
deliver resilient revenue and profit growth, while a new strategic initiative
has been launched within the used vehicle business in April, focused on
retailing vehicles in the 7-14‑year‑old segment. This initiative targets
the strongest area of current UK used car demand and leverages the Vertu
brand, distribution capability and data‑led pricing expertise to enhance
volumes and margins.
In addition, following the successful delivery of cost savings actions
implemented after the Autumn 2024 Budget to offset material wage cost
pressures, the Group initiated a further £10m cost efficiency programme ahead
of the new financial year. This programme included continued productivity
improvements, increased use of AI‑enabled technology, reduced planned
marketing expenditure following the April 2025 rebrand and further headcount
rationalisation.
The Group remains focused on navigating this period of structural adjustment
in the sector, where consumer and business confidence remains subdued and
Government intervention continues to shape market dynamics. As one of the
largest and most scaled operators in the UK automotive retail sector, the
Group is well positioned to benefit from scale advantages and disciplined
execution. The long‑term fundamentals of the Group's business remain
intact. The Group continues to execute its strategy and is well placed to
capitalise on opportunities that emerge during this period of market
adjustment, supported by a strong financial position and a proven track record
of delivery.
Robert Forrester, CEO
CHIEF FINANCIAL OFFICER'S REVIEW
The Group's income statement for the Year is summarised below:
FY26 FY25 Variance
£'m £'m %
Revenue 4,833.8 4,763.9 1.5%
Gross profit 540.0 532.9 1.3%
Gross margin 11.2% 11.2% -
Underlying operating expenses (493.5) (480.5) (2.7%)
Operating expenses as a percentage of revenue (10.2%) (10.1%) (0.1%)
Adjusted operating profit 46.5 52.4 (11.3%)
Net finance charges (22.0) (23.1) 4.8%
Adjusted profit before tax 24.5 29.3 (16.4%)
Non-underlying items(4) (4.2) (4.5) 6.7%
Profit before tax 20.3 24.8 (18.1%)
Taxation (5.6) (6.6) 15.2%
Profit after tax 14.7 18.2 (19.2%)
(4) Non-underlying items represent impairment charges, reorganisation costs
and other non-underlying items
The Group generated an adjusted profit before tax of £24.5m (FY25:
£29.3m). Underlying operating profitability declined due to the continued
impact of the Zero Emission Vehicle ('ZEV') mandate on new vehicle volumes and
margins and the impact of the cyber-attack on JLR in the second half of the
Year with its consequent disruption of the Group's Land Rover operations.
Gross profit losses from the impact of this cyber-attack amounted to
approximately £3.9m, which have been mostly mitigated by the recognition of
£3.4m settlement from insurers within operating expenses (other income).
Revenue was £4.8 billion, growing 1.5% compared to the prior year.
Acquisitions completed after 1 March 2024 contributed additional revenue of
£154.5m, £112.4m of this revenue growth from acquisitions is attributed to
the acquisition of Burrows Motor Company Limited, completed on 29 October
2024. Dealerships disposed of or closed in the Year resulted in a £53.3m
reduction in revenue.
Revenue in the Core Group decreased by £31.3m (0.7%) driven in part by the
move to agency arrangements in the Group's MINI and Honda franchises during
the Year. Under such agreements, the vehicle is invoiced direct to the
customer by the Manufacturer and revenue in the dealership represents a
handling fee for the transaction. This change reduced Group new vehicle
turnover by approximately £70.0m for the Year. Excluding this agency
effect, new vehicle margins would have fallen year‑on‑year by 0.4%, driven
by increased Manufacturer discounting and reduced support in a highly
pressured retail market. Overall, Core Group new vehicle revenue fell by
£113.0m, reflecting the move to agency described above, a decline in
Motability volumes delivered and a 1% reduction in the average selling price
of new vehicles by the Group reflecting lower van sales.
Operating expenses increased as a percentage of revenue during the Year,
reflecting the reduction in reported new vehicle revenue arising from the move
to agency arrangements. Excluding the impact of new agency arrangements on
revenue, total Group operating expenses would have remained stable as a
percentage of revenue year‑on‑year. This demonstrates continued cost
discipline across the Core Group, notwithstanding undoubted inflationary
pressures, including those unavoidable increases, driven by Minimum Wage
legislation and increases in Employer's National Insurance costs.
Net finance charges fell compared to last year as Manufacturer new vehicle
stocking charges reduced as a result of lower interest rates.
Non-underlying costs of £5.1m arose as a result of dealership closures,
impairment charges and restructuring costs to reduce the cost base of the
Group. This is offset by £0.9m of exceptional income relating to profit on
disposal of surplus freehold properties and disposal of a business.
Revenue and Gross Profit by Department
An analysis of total revenue and gross profit by department is set out below:
TOTAL GROUP CORE GROUP
FY26 FY25 Variance FY26 FY25 Variance
£'m £'m £'m £'m £'m £'m
Revenue
New 1,375.9 1,439.9 (64.0) 1,281.3 1,394.3 (113.0)
Fleet & Commercial 1,094.0 1,054.8 39.2 1,088.1 1,050.4 37.7
Used 1,929.8 1,851.4 78.4 1,774.2 1,742.5 31.7
Aftersales 434.1 417.8 16.3 408.4 396.1 12.3
Total Group Revenue 4,833.8 4,763.9 69.9 4,552.0 4,583.3 (31.3)
Gross Profit
New 105.0 110.2 (5.2) 98.2 106.9 (8.7)
Fleet & Commercial 52.2 55.7 (3.5) 51.3 55.5 (4.2)
Used 132.6 130.9 1.7 125.0 124.8 0.2
Aftersales 250.2 236.1 14.1 234.0 225.6 8.4
Total Gross Profit 540.0 532.9 7.1 508.5 512.8 (4.3)
Gross Margin
New 7.6% 7.7% (0.1%) 7.7% 7.7% -
Fleet & Commercial 4.8% 5.3% (0.5%) 4.7% 5.3% (0.6%)
Used 6.9% 7.1% (0.2%) 7.0% 7.2% (0.2%)
Aftersales(5) 44.4% 43.7% 0.7% 44.2% 43.9% 0.3%
Total Gross Margin 11.2% 11.2% - 11.2% 11.2% -
( )
(5) Aftersales margin expressed on internal and external revenues
The total and like-for-like volumes of vehicles sold by the Group and trends
against market data are set out below:
Total Units Sold % Like-for-Like Units Sold %
FY26 FY25 Variance FY26 FY25 Variance
Used retail vehicles 91,287 88,851 2.7% 83,860 83,622 0.3%
Direct new retail cars 33,752 32,938 2.5% 30,614 31,001 (1.2%)
Agency new retail cars 4,068 2,846 42.9% 3,825 2,733 40.0%
Total new retail cars 37,820 35,784 5.7% 34,439 33,734 2.1%
Motability cars 16,901 19,693 (14.2%) 15,737 18,867 (16.6%)
Direct fleet cars 24,183 19,460 24.3% 23,202 18,201 27.5%
Agency fleet cars 9,237 9,075 1.8% 9,446 8,794 7.4%
Total fleet cars 33,420 28,535 17.1% 32,648 26,995 20.9%
Commercial vehicles 16,172 16,652 (2.9%) 15,470 17,217 (10.1%)
Total New vehicles 104,313 100,664 3.6% 98,294 96,813 1.5%
Total vehicles 195,600 189,515 3.2% 182,154 180,435 1.0%
( )
( ) UK Market year-on-year change(6) Group year-on-year change v UK market(7)
New Retail Car 5.3% (3.2%)
Motability Car (17.8%) 1.2%
Fleet Car 12.7% 8.2%
Commercial (8.6%) (1.5%)
(6) Source SMMT
(7) Represents the year-on-year variance of like-for-like Group volumes
compared to the UK trends reported by SMMT
New retail cars and Motability sales
Overall, the UK new car market in 2025 remained heavily shaped by regulatory
intervention, significant Manufacturer subsidies of BEV product and shifting
brand dynamics, particularly the accelerated growth of new Chinese entrants.
While headline UK registration volumes improved, underlying industry
profitability remained under pressure.
For the first time since the pandemic, UK new car registrations exceeded 2
million units in the 12 months to 31 December 2025. Nevertheless, volumes
remained around 12% below pre‑Covid levels and the market continued to shift
towards lower margin fleet channels. Headline growth was supported by
increased registrations from new Chinese brands and elevated
pre‑registrations, which flow through the used car channel rather than the
Group's new retail performance. Against this backdrop, the Group delivered
like‑for‑like new retail volume growth of 2.1% in the year to 28 February
2026, compared with 5.3% growth in UK private registrations. Total Group
market share of the new retail market remained stable at 4.8% (FY25: 4.8%).
Motability volumes declined sharply during the Year, with UK market
registrations falling 17.8% in the year ended 28 February 2026, driven by
renewal timing within the three‑year replacement cycle and a reduced
appetite among several Manufacturers for this higher‑cost channel. The
Group saw a similar year‑on‑year reduction in like-for-like Motability
volumes of 16.6%. Total Group market share in this channel improved to 5.8%
(FY25: 5.6%). The volume decline improved in H2, falling 8.2%, an
improvement on the 19.2% decline in H1.
Within the overall new retail volumes, the Group again increased its market
share of the BEV retail car market. The Group's like-for-like BEV sales
increased 71.0% compared to FY25. This compares to a 50.2% increase in UK
private BEV registrations over the same period. The Group has consistently
grown retail BEV sales ahead of the market for a prolonged period, gaining
market share in this critical area and helping the Manufacturers to reduce the
gap to their ZEV mandate targets.
The Group saw an £8.7m reduction (FY25: £10.9m reduction) in Core Group new
car gross profit generation in the Year compared to FY25. A modest £0.1m
reduction in gross profit arose from the impact of the JLR cyber-attack, with
production coming back on stream quicker than originally expected.
The new car gross profit reduction marks the second consecutive year of
material declines and reflected the combined impact of reduced Motability
volumes and weaker margins. The Group delivered broadly stable new vehicle
margin percentages, aided by the introduction of agency arrangements in more
franchises (MINI and Honda), which reduce reported revenues and enhance
percentage margins. Excluding the impact of the transition to agency,
percentage margin reductions would have been more pronounced, reflective of
the weaker market conditions.
Fleet & Commercial vehicle sales
In 2025, the UK new car market growth was achieved largely because of a growth
in fleet sales. BEV vehicle sales saw strong growth in the fleet channel, as
corporate sales remain the main driver of BEV adoption because of tax
incentives for corporate users, the growth of salary sacrifice schemes and
increase in personal leasing via the broker channel. Registration volumes
in the UK car fleet market (excluding Motability) have consequently grown
12.7% year-on-year compared to FY25.
Like-for-like, the Group delivered over 32,000 fleet cars in the Year,
representing an increase of 20.9% compared to FY25. The Group therefore
outperformed the wider market trend, reflecting the strength of the Group's
fleet operations. Total Group market share of the fleet car market was 3.7%
(FY25: 3.5%). This performance was driven through increased contract hire
supply by the Group including through the broker channel. The Group does not
typically engage in fleet supply through the low margin daily rental channel
which also saw strong UK growth.
The Group's like-for-like sales of new commercial vehicles declined by 10.1%
over the Year. This performance slightly lagged the market decline of
8.6%. The Group's total market share of the LCV market was stable at 5.1%
(FY25: 5.1%).
Overall, the Group saw a £4.2m reduction in gross profit generation from its
Core Group combined fleet and commercial operations. Like-for-like fleet and
commercial volumes increased 8.8% and almost 50,000 vehicles were sold by the
Group in this channel. An average selling price in the Core Group of
£28,592 (FY25: £29,840) reflected a shift in mix from van sales to more
passenger cars. Gross profit per unit earned on fleet and commercial vehicle
sales remained strong at over £1,000 per unit, however, this represented a
reduction of almost £200 per unit in the Core Group compared to last year.
This decrease is reflective of both the reduced mix of commercial vehicle
sales and the pressure on the market in terms of electrification and
Manufacturer discounting of vehicles. The JLR cyber-attack also disrupted
fleet vehicle supply in the second half, such that £1.3m of the reduction in
Core Group gross profit in this channel relates to lower volumes of this
higher margin premium fleet supply channel.
Used retail vehicles
The UK used vehicle market remained resilient, albeit with uneven demand by
age segment. The Group maintained strong inventory management, high stock
turn and disciplined pricing powered by the Group's Vertu Insights platform.
Like‑for‑like used vehicle volumes were broadly flat, while gross profit
per unit reduced slightly year‑on‑year, reflecting both the increase in
charges from the Group's service departments in preparing vehicles for sale
and some margin erosion, particularly in younger used cars which were impacted
by discounting in the new vehicle channel.
Core Group gross profit from the sale of used vehicles totalled £125.0m for
the Year, representing a £0.2m increase year‑on‑year. Like‑for‑like
volume growth was delivered; however, retained gross profit declined slightly
due to reduced margins. During the Year, the Group increased the internal
labour rate charged by the service department to the vehicle sales departments
for the preparation of vehicles for sale, reflecting higher underlying cost
pressures in the aftersales area. This change increased aftersales
profitability by approximately £4.3m, with much of the benefit reflected as
an increased cost of sale within the used vehicle department. The JLR
cyber-attack also had a direct impact on used vehicle profitability, resulting
in a £1.7m loss of gross profit in the used vehicle department in the Group's
JLR dealerships compared to normalised levels.
Group like‑for‑like used vehicle volumes grew 0.3% over the Year, with
gross profit per unit of £1,501 achieved (FY25: £1,508). Gross margin
achieved in the Core Group used vehicle department was 7.0% which was similar
to last year's level of 7.2%.
Aftersales
The Group's aftersales operations are a major contributor to Group profit
generating over 46% of total gross profit. The Group is delighted to report
that it saw growth in gross profit generation in all major channels of
aftersales on a like-for-like basis as set out below:
Service Parts Accident & Smart Repair Fuel Forecourt Total
£'m £'m £'m £'m £'m
Revenue(8) 213.6 276.6 29.5 10.0 529.7
Revenue(8) change 7.6 9.3 (0.3) (1.0) 15.6
Revenue(8) change (%) 3.7 3.5 (1.0) (9.0) 3.0
Gross profit 156.8 57.7 18.7 0.8 234.0
Gross profit change 7.2 0.8 0.4 - 8.4
Gross margin(9) FY26 (%) 73.4 20.9 63.3 9.0 44.2
Gross margin(9) FY25 (%) 72.6 21.3 61.2 8.2 43.9
Margin change (%) 0.8 (0.4) 2.1 0.8 0.3
(8) includes internal and external revenues
(9) Aftersales margin expressed on internal and external revenues
· Service
Vehicle servicing and repair remains a key revenue stream for the Group,
driven by strong demand and supported by effective customer retention and
acquisition strategies. Service plans, through which customers pay monthly
or upfront for their annual service, are a vital part of the Group's retention
strategy. The Group's service plan and Motability customer databases create
significant resilience to future aftersales revenue streams.
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
£4.3m of additional labour gross profit in the Core Group service department
which has been absorbed by the vehicle sales departments, predominantly the
used vehicle department. This represents 60% of the increase in
like-for-like service gross profit.
The Group's Pay Later solution, which allows service customers to defer
payments interest‑free for up to five months on repair work identified,
continued to deliver strong growth and enhance aftersales performance.
Uptake increased significantly year‑on‑year, with the number of plans
rising 73.2%, from approximately 19,400 in FY25 to 33,600 in FY26. This
flexible payment option encourages more customers to approve essential repairs
identified through the Group's Vehicle Health Check (VHC) process, which
provides a thorough inspection of each vehicle, supported by technician video
and a priced quotation that can be authorised remotely through digitalisation.
The success of the use of this product contributed to record‑high average
invoice values in service of £360 (FY25: £335) during the Year. The
balance due from customers at 28 February 2026 was £4.6m (FY25: £4.0m) and
bad debt experience on this product has, to date, remained negligible.
Reflecting the trends set out above, like-for-like service revenue growth of
£7.6m (3.7%) was delivered in the Year. Gross margin percentages on vehicle
servicing increased to 73.4% (FY25: 72.6%) in the Core Group. Gross profit
generation rose on a like-for-like basis by £7.2m in service reflecting both
the increase in aftersales revenues, aided by increase in internal rates and
improvement in margin achieved. This was partially offset by disruption from
the JLR cyber-attack in the second half, which reduced service profit by
£0.8m year-on-year.
· 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. Whilst the JLR cyber-attack
disrupted parts supply in the short term, supply resumed quickly and revenues
recovered, such that there was no material impact on parts profitability in
the Year as a whole. The Core Group grew parts revenue by £9.3m
year-on-year to £276.6m, driven by a growth in wholesale parts sales. This
led to a £0.8m increase in gross profit generation in the Core Group's parts
departments. Margins declined slightly to 20.9% in the Year (FY25: 21.3%)
because of a shift in sales mix towards the lower margin wholesale activity as
the Group was successful in winning a number of large contracts.
· Accident and Smart Repair
The Group's Accident Repair Centres are managed separately from the dealership
businesses in a standalone division. The Group operates 15 Accident Repair
Centres, from Sunderland in the Northeast to Truro in the Southwest of
England. Accident Repair Centre performance during the year was impacted by
lower activity levels, driven by significantly reduced UK accident volumes.
This is likely linked to the growth of in car technology to aid the driver and
reduce crash impacts. Strong margin retention helped to offset some of the
impacts of the reduction in volume of repairs.
Within this segment the Group also operates cosmetic repair operations,
serving the dealerships in preparing used vehicles cosmetically for resale
with 115 vans for internal use. Vertu Repair Master, the retail facing part
of the Group's cosmetic repair business, continued to develop during the
year. The Group now operates 20 mobile repair vans nearly doubling capacity
in the Year. Performance reflects the early‑stage growth profile of this
new operation. Activity increased as customer awareness and corporate
relationships expanded, although profitability remained modest as the business
invested in technician capacity and operating infrastructure. Vertu Repair
Master is expected to contribute more meaningfully as scale and utilisation
improve.
Overall, like-for-like gross profit generated from the Group's accident and
smart repair businesses grew by £0.4m compared to last year.
· Fuel Forecourt
One fuel forecourt was operated by the Core Group in FY26, in Widnes,
Cheshire. As a result of the tempering of fuel prices, this forecourt saw
reduced revenues but improved margins of 9.0% in the Year (FY25: 8.2%).
Overall, gross profit was level compared to the previous year.
Operating Expenses
A summary of Group operating expenses is set out below:
FY26 FY25 FY26 variance to FY25
£'m £'m £'m %
Salary costs 261.9 258.1 3.8 1.5%
Property costs and depreciation 57.1 55.3 1.8 3.3%
Vehicle and valeting costs 52.2 56.1 (3.9) (7.0%)
Marketing costs 37.4 33.8 3.6 10.7%
Other (including IT) 48.2 49.6 (1.4) (2.8%)
Share based payments and amortisation 3.7 2.7 1.0 37.0%
460.5 455.6 4.9 1.1%
Insurance settlement (JLR cyber-attack) (3.4) - (3.4) -
Core Group operating expenses 457.1 455.6 1.5 0.3%
Core Group operating expenses as a % of Core Group revenues 10.0% 9.9%
0.1%
Acquisitions and start-up operations 28.3 10.3 18.0
Disposals 8.1 14.6 (6.5)
Group net underlying operating expenses 493.5 480.5 13.0 2.7%
Underlying operating expenses as a % of revenue 10.2% 10.1% 0.1%
Reported underlying operating expenses of £493.5m increased by 2.7% (£13.0m)
compared to the year ended 28 February 2025. Dealerships acquired, started
up, or sold in the period since 1 March 2023 generated a net £11.5m of this
increase. Underlying Core Group operating expenses, excluding the JLR
insurance receipt, grew by just 1.1% compared to last year, despite
inflationary pressures in the UK economy including Minimum Wage increases and
the significant rise in Employer's National Insurance which impacted the Group
from 1 April 2025. This reflected a major focus on costs that could be
controlled by the Group and the benefit of the cost reduction programmes
delivered at the ends of FY25 and FY26.
The largest operating cost of the Group is salary costs, which have increased
by just £3.8m (1.5%) in the Core Group, compared to last year. Salary costs
shown in operating expenses exclude the productive cost of the Group's
aftersales technicians, which are included in cost of sales. The rise in the
Employer's National Insurance cost in April 2025 led to additional costs of
£6.5m in the Core Group compared to prior year. The proactive actions that
the Group took to mitigate such non-discretionary significant cost increase is
apparent in the more modest increase in salary costs overall.
The cost of the Core Group's demonstrator and courtesy vehicle fleet reduced
in the Year, reflecting tighter controls over demonstrator vehicles ensuring
achievement of minimum demonstrator requirements for our Manufacturers and
optimising our courtesy vehicle fleet to ensure the lowest cost options have
been used where practical. In parallel, valet costs were significantly
reduced, following the successful extension of a trial to charge service
customers for vehicle wash and vacuum services in the Group's volume
dealerships when customers visited for a service. Customer opt‑out rates
increased materially under this approach, delivering a meaningful reduction in
costs. The Group has seen no significant change in customer satisfaction
levels because of this change and as such the programme has been rolled out to
all of the Group's volume dealerships from 1 March 2026.
Property costs in the Core Group increased as a result of the growth in
business rates. Business rates remain a significant cost to the Group, with
costs in the Core Group of £17.4m in FY26, compared to £15.7m in FY25.
This cost increased as anticipated, as several refunds had been received in
FY25 following successful rating appeals and the level of rates refunds
received in FY26 was lower.
Other costs have decreased by £1.4m (2.8%) year-on-year reflecting the
Group's sharp focus on all aspects of its cost base in the Period. This
includes a reduction in energy costs due to the Group's effective buying
strategy and use of self-generated solar powered energy. Solar power is now
in place at 52 locations. The Group continues to assess other energy saving
measures such as building energy management systems and early indications from
pilots is that investment in this area may deliver further substantial energy
savings. The Group's buying strategy on energy ensures that approximately
80% of energy purchases for FY27 have already been purchased at pre-February
2026 prices so limiting the impact of an energy crisis in the near term.
Core Group marketing costs increased by £3.6m in the Year, reflecting
targeted investment to support the transition to operating under a single
retail brand, Vertu, from April 2025. This included increased brand
awareness activity to establish the Vertu brand nationally, alongside the
delivery of three Group‑wide sales events during the Year, comprising two
used vehicle events and, for the first time, a Group‑wide new vehicle event.
These initiatives drove higher marketing expenditure in the Year but were
undertaken with a clear focus on return on investment and supported Group
sales volumes. The New car event in February supported by TV marketing was a
major success and helped to underpin a successful March result in 2026. UK
Vertu brand awareness rose from 14% to 19% in the Year.
The settlement of £3.4m, in respect of the Group's insurance claim around the
losses incurred as a result of the JLR cyber-attack has been reflected in
other operating expenses in the Year. The cash in respect of this settlement
was received subsequent to the Year end.
Non-Underlying Operating Expenses
FY26 FY25 FY26 Var to FY25 Anticipated annual cost saving in FY27
£'m £'m £'m £'m
Redundancy costs 1.9 2.8 (0.9) 7.0
Impairment charges 1.4 0.5 0.9 -
Dealership closure costs 1.1 0.1 1.0 0.4
Property remediation provision 0.7 - 0.7 -
Rebrand costs - 0.8 (0.8) 1.2
Acquisition fees - 0.3 (0.3) -
Non-underlying operating expenses 5.1 4.5 0.6 8.6
Profit on sale of properties and businesses (0.9) - (0.9) -
Net non-underlying operating expenses 4.2 4.5 (0.3) -
Other cost savings 1.4
10.0
Non-underlying operating expenses in FY26 comprised £1.9m of redundancy and
headcount rationalisation costs as the Group again sought to reduce its cost
base, reflecting a reduction of approximately 280 colleagues in late FY26,
supported partly by increased productivity through continued technology
deployment. These changes were made with the aim that gross profit
generation and customer experience levels were not compromised. This recent
headcount change follows a similar reduction of approximately 290 colleagues
undertaken in FY25 following the changes to the Minimum Wage and Employer's
National Insurance contributions in the October 2024 Autumn budget. Annual
net cost savings of £7.0m are anticipated as a result of these headcount
reductions.
The Group also incurred £1.1m of dealership closure costs as it exited
certain dealership operations as part of its ongoing programme to prune
locations with lower than required returns. Net annual savings of £0.4m
will arise as a result of these closures in avoided trading losses. These
actions also generated positive cash inflows of £6.2m in the Year through
property disposals and release of working capital.
£1.4m of impairment charges were recognised, including a goodwill write-off
of £0.6m in respect of the Group's Motorrad bike businesses where performance
has been below required return levels. A strategy has been formulated to
increase returns from these operations going forward. In addition,
impairments of property and right-of-use assets in locations where franchise
representation has changed have arisen.
A £0.7m provision was recognised for property repair following a significant
failure of the roof at one dealership, with expert reports obtained in the
Year and the estimated cost of remediation provided for. The Board is
evaluating whether a legal claim can be undertaken in respect of this.
Finally, the Group recognised £0.3m of exceptional income on the disposal of
the trade and assets of Huddersfield Honda in February 2026. A further
£0.6m has been generated in profits from the sale of surplus properties in
the year and this has been classified as non-underlying.
Savings of £1.2m are anticipated in FY27 as a result of the Group's move to a
single brand as efficiency gains and reduced marketing expenses arise.
Additional savings of £1.4m are expected following the successful
negotiation of Group supply contract renewals, the benefit of additional solar
panel installations in several of the Group's dealership portfolio and reduced
vehicle cleaning costs as charging for service wash and vacuum is rolled out
across the Group's volume dealerships.
In total, £10m of cost benefits are expected in FY27 compared to FY26.
Net Finance Charges
Net finance charges are analysed below:
FY26 FY25 FY26 Var to FY25
£'m £'m £'m
New vehicle Manufacturer stocking interest 8.9 9.1 (0.2)
Mortgage interest 5.4 6.2 (0.8)
Interest on bank borrowings 4.1 4.1 -
Used vehicle stock funding interest 0.4 0.7 (0.3)
Interest on lease liabilities 4.5 4.1 0.4
Interest income (1.3) (1.1) (0.2)
Net Finance Charges 22.0 23.1 (1.1)
The Group saw a small reduction in interest charged by Manufacturers on funded
new vehicle inventory. Total Group new vehicle stock as at 28 February 2026
was £579m (2025: £577m), including the impact of acquisitions. Reduced
interest rates provided the favourable year-on-year variances in interest
costs.
Mortgage interest has fallen as the capital amount outstanding has reduced as
scheduled repayments are made.
To minimise the interest rate risk to the Group, derivative contracts have
been entered into. An interest rate swap over £30m of the Group's Revolving
Credit Facility borrowing fixes the underlying SONIA rate charged at 3.82%.
The largest of the Group's mortgages with BMW Financial Services with a
balance at 28 February 2026 of £63.3m operates on a fixed all-in rate of
7.03%.
Interest on lease liabilities increased year-on-year, as newer leases, lease
extensions and the acquisition of leasehold dealerships are subject to higher
interest rates than those applied to historic right-of-use liabilities,
reflecting the rise in applicable base rates in the intervening period.
Pension Costs
The Group operates a closed defined benefit pension scheme. The latest
actuarial valuation, carried out as at 5 April 2024, confirmed that the scheme
was in a funding surplus of £2.0m. Accordingly, no contributions are
required from the Company in respect of accrued benefits, with scheme expenses
met from scheme assets. No contribution payments are expected for the
accounting period beginning 1 March 2026.
The scheme invests in an asset portfolio designed to fully hedge interest rate
and inflation risks, supporting the maintenance of its fully funded position.
On an accounting valuation basis, the scheme remained in surplus during the
Year. A small reduction in the surplus arose, reflecting experience
movements that were less favourable than previously assumed. Overall, a net
actuarial loss of £0.3m was recognised in the Statement of Comprehensive
Income for the Year. The accounting surplus decreased to £3.6m as at 28
February 2026 (2025: £3.9m).
Tax Payments
The Group's underlying effective rate of tax for the Year was 26.2% (FY25:
25.8%). The overall effective tax rate, increased to 27.8% (FY25: 26.9%) as
a result of an increase in non-qualifying depreciation. The total tax charge
for the Year reduced to £5.6m (FY25: £6.6m). The Group continues to be
classified as 'low risk' in a recent review 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.
Cash Flows
Free Cash Flow of £30.7m (FY25: £37.3m) was generated in the Year:
FY26 FY25
£'m £'m
Operating profit 42.3 47.8
Depreciation, amortisation, share based payments & other 44.4 40.2
Movement in working capital 1.3 7.0
Interest and tax payments (27.3) (28.4)
Net Cash Inflow from operating activities 60.7 66.6
Sustaining capital expenditure (13.0) (14.9)
Proceeds from sale of property, plant and equipment 5.3 5.6
Lease principal repayments (22.3) (20.0)
Free Cash Flow 30.7 37.3
Net cash inflow from operating activities of £60.7m was delivered with a
minimal movement in working capital, an inflow of £1.3m (FY25: £7.0m). The
working capital movement included an outflow of £8.0m in respect of an
increase in used vehicle inventory, a further outflow of approximately £5.0m
in respect of customer deposits for vehicles, with part of this reduction
related to the move to the Agency model in some franchises. These outflows
were more than offset by an inflow in respect of trade receivables reflecting
the timing of fleet customer receipts.
Financing and Capital Structure
The Group has a balance sheet with shareholders' funds of £357.5m (2025:
£357.6m) underpinned by a freehold and long leasehold portfolio of £327.1m
(2025: £330.9m) and net debt (excluding lease liabilities) of £61.3m as at
28 February 2026. The Group's conservative financing and capital structure
resulted in a strong tangible net assets position of £235.1m as at 28
February 2026, representing 75.9p per share.
The Group has a committed acquisition debt facility of £93m, expiring in
December 2027, of which £56m was drawn at 28 February 2026, leaving £37m
undrawn. The Group operated comfortably within all applicable covenants
during the Year. The Board intends to refinance the revolving credit
facility in the summer of 2026, well in advance of maturity, to enhance
flexibility around the permitted uses of the facility. Lenders have confirmed
their appetite to continue to support the Group and good progress has been
made to date in discussions.
The Group also has long‑term debt funding in the form of 20‑year
amortising mortgages, with no financial covenants applicable, totalling
£77.1m (FY25: £77.1m) provided by BMW Financial Services, together with a
further 10‑year mortgage of £7.5m (FY25: £7.5m) from Toyota Financial
Services. These facilities have combined annual capital repayments of £5.0m.
The Group makes use of used vehicle stocking loans provided by third party
banks, subject to interest and secured on the related used vehicle
inventories. While, during the Year, there was some utilisation of the
facility, as at 28 February 2026 and 2025, no amounts were drawn. The Group
has a £70.0m facility under these arrangements and held £174.3m of
unencumbered used vehicle inventory at 28 February 2026. Stocking loans on
used vehicles by third party banks are classified as debt by the Group if they
arise.
Capital Allocation
Capital allocation remains central to the Board's decision‑making. The Board
is committed to maintaining a conservative and resilient funding structure,
while selectively deploying the Group's debt facilities to support organic
investment and acquisitions that meet disciplined return metrics.
Cash returns to shareholders remain a core priority of the Board's capital
allocation framework. The Group's dividend policy is to target dividend
cover compared to adjusted diluted earnings per share of 2.5 to 3.5 times.
An interim dividend of 0.90p per share was paid in January 2026. The Board
recommends a final dividend in respect of the year ended 28 February 2026 of
1.15p per share to be approved at the Annual General Meeting on 24 June
2026. This dividend will be paid, subject to shareholder approval, on 24
July 2026. The ex-dividend date will be 25 June 2026 and the associated
record date 26 June 2026. This final dividend brings the total dividend in
respect of FY26 to 2.05p per share (FY25: 2.05p). Against adjusted, fully
diluted EPS of 5.30p, the total dividend for the year is covered 2.6 times.
During the Year, the Group purchased 17.4m shares for cancellation,
representing 5.3% of opening issued share capital, at a cost of £10.6m. The
Board considers the Company's shares to be materially undervalued relative to
intrinsic value and tangible net asset value per share and continues to deploy
capital through share buybacks where this creates long‑term value for
shareholders. Since the commencement of the buyback programme in October
2018, and up to 10 March 2026, the Group has reduced its issued share capital
by 21.4%. In March 2026, the Board announced a further £12.0m share buyback
programme running to 28 February 2027.
At 28 February 2026, the Group held 2.7m shares in its Employee Benefit Trust
('EBT') (treated as treasury shares) for the purpose of satisfying exercises
of shares under the Group's share ownership plans, such as Partnership Share
Options. Subsequent to 28 February 2026 and to 30 April 2026 4.3m shares
have been purchased into the EBT for £2.6m.
The Group spent £2.5m on acquisitions during the Year, invested £2.1m in new
build locations or land and building purchases, and incurred £3.2m on
multi-franchising or the expansion of capacity at existing dealerships,
collectively 'expansion capital expenditure'. These cash outflows are
excluded from sustaining capital expenditure utilised in the calculation of
Free Cash Flow.
The Group also deploys capital on its extensive franchised dealership network,
expending a net £13.0m (FY25: £19.2m) on asset additions in FY26. Proceeds
of £5.3m (FY25: £5.6m) in respect of sale of surplus properties and assets
have been offset from expenditure in these net numbers. Expenditure included
the £5.3m of non-sustaining 'expansion capital expenditure' referenced above.
The balance of £7.7m is considered sustaining capital expenditure. For
FY27, sustaining capital expenditure is anticipated to be approximately
£16.0m, which includes some redevelopment projects to meet revised
Manufacturer standards which do not necessarily increase Group capacity. A
further £3.6m of expenditure is currently anticipated in respect of expansion
capital expenditure. The introduction of new franchises to the Group in FY27
will increase FY27 expansion capex above the £3.6m with costs currently being
assessed by the Group. Updates to shareholders will be made when the capital
expenditure and trading impact of new franchises is finalised.
Karen Anderson, CFO
CONSOLIDATED INCOME STATEMENT (AUDITED)
For the year ended 28 February 2026
Underlying items 2026 Non-underlying items 2026 Total 2026 Underlying items 2025 Non-underlying items 2025 Total 2025
(Note 2) (Note 2)
Note £'000 £'000 £'000 £'000 £'000 £'000
Revenue 4,833,796 - 4,833,796 4,763,926 - 4,763,926
Cost of sales (4,293,787) - (4,293,787) (4,230,992) - (4,230,992)
Gross profit 540,009 - 540,009 532,934 - 532,934
Operating expenses (493,523) (4,228) (497,751) (480,528) (4,569) (485,097)
Operating profit / (loss) 46,486 (4,228) 42,258 52,406 (4,569) 47,837
Finance income 3 1,343 - 1,343 1,103 - 1,103
Finance costs 3 (23,359) - (23,359) (24,190) - (24,190)
Profit / (loss) before tax 24,470 (4,228) 20,242 29,319 (4,569) 24,750
Taxation 4 (6,408) 789 (5,619) (7,576) 929 (6,647)
Profit / (loss) for the year attributable to equity holders 18,062 (3,439) 14,623 21,743 (3,640) 18,103
Basic earnings per share (p) 5 4.62 5.48
Diluted earnings per share (p) 5 4.29 5.10
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (AUDITED)
For the year ended 28 February 2026
2026 2025
£'000 £'000
Profit for the year 14,623 18,103
Other comprehensive (expense) / income
Items that will not be reclassified to profit or loss:
Actuarial (losses) / gains on retirement benefit obligations (280) 1,471
Deferred tax relating to actuarial losses / (gains) on retirement benefit 70 (368)
obligations
Items that may be reclassified subsequently to profit or loss:
Cash flow hedges (239) (187)
Deferred tax relating to cash flow hedges 60 47
Other comprehensive (expense) / income for the year, net of tax (389) 963
Total comprehensive income for the year
attributable to equity holders 14,234 19,066
CONSOLIDATED BALANCE SHEET (AUDITED)
As at 28 February 2026
2026 2025
£'000 £'000
Non-current assets
Goodwill and other indefinite life assets 135,447 135,506
Other intangible assets 1,129 1,557
Retirement benefit asset 3,639 3,895
Property, plant and equipment 354,029 357,453
Right-of-use assets 88,665 83,734
Derivative financial instruments - 147
Total non-current assets 582,909 582,292
Current assets
Inventories 819,995 816,939
Trade and other receivables 78,629 98,951
Cash and cash equivalents 73,076 72,647
971,700 988,537
Property assets held for sale 4,535 7,921
Total current assets 976,235 996,458
Total assets 1,559,144 1,578,750
Current liabilities
Trade and other payables (922,585) (940,541)
Current tax liabilities (794) (148)
Deferred consideration - (1,000)
Contract liabilities (10,749) (11,753)
Borrowings (5,120) (5,081)
Lease liabilities (19,240) (19,182)
Total current liabilities (958,488) (977,705)
Non-current liabilities
Deferred income tax liabilities (26,403) (26,097)
Contract liabilities (8,738) (8,435)
Borrowings (129,271) (134,133)
Lease liabilities (78,711) (74,829)
Total non-current liabilities (243,123) (243,494)
Total liabilities (1,201,611) (1,221,199)
Net assets 357,533 357,551
Capital and reserves attributable to equity holders of the Group
Ordinary share capital 31,270 33,010
Share premium 124,939 124,939
Other reserve 10,645 10,645
Hedging reserve (99) 80
Treasury share reserve (1,678) (4,812)
Capital redemption reserve 8,457 6,717
Retained earnings 183,999 186,972
Total equity 357,533 357,551
CONSOLIDATED CASH FLOW STATEMENT (AUDITED)
For the year ended 28 February 2026
2026 2025
Note £'000 £'000
Cash flows from operating activities
Operating profit 42,258 47,837
Loss / (profit) on sale of property, plant and equipment 73 (1,168)
Profit on sale of assets previously held for sale (579) -
Profit on sale of business (310) -
Profit on lease modification (1,528) (47)
Amortisation of other intangible assets 528 558
Depreciation of property, plant and equipment 19,355 18,201
Depreciation of right-of-use assets 22,877 20,239
Impairment of property, plant and equipment 454 524
Impairment of goodwill 609 -
Impairment of right-of-use assets 351 -
Movement in working capital 1,301 6,986
Share based payments charge 2,603 1,890
Cash inflow from operations 87,992 95,020
Tax received 810 1,328
Tax paid (5,572) (6,462)
Finance income received 1,134 984
Finance costs paid (23,645) (24,233)
Net cash inflow from operating activities 60,719 66,637
Cash flows from investing activities
Acquisition of businesses, net of cash, overdrafts and borrowings acquired (2,031) (10,961)
Acquisition of freehold and long leasehold land and buildings (1,874) (2,230)
Purchases of intangible assets (116) (145)
Purchases of other property, plant and equipment (18,094) (24,611)
Proceeds from disposal of business 973 -
Proceeds from disposal of property, plant and equipment 5,257 5,575
Net cash outflow from investing activities (15,885) (32,372)
Cash flows from financing activities
Proceeds from borrowings 7 - 12,526
Repayment of borrowings 7 (5,126) (8,097)
Principal element of lease repayments (22,339) (19,954)
Purchase of treasury shares - (4,000)
Sale of treasury shares 260 46
Repurchase of own shares (10,727) (4,784)
Dividends paid to equity holders (6,473) (7,954)
Net cash outflow from financing activities (44,405) (32,217)
7 429 2,048
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year 72,647 70,599
Cash and cash equivalents at end of year 73,076 72,647
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (AUDITED)
For the year ended 28 February 2026
Ordinary Share Other Hedging Treasury share Capital redemption reserve Retained Total
share capital premium reserve reserve 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 year - - - - - - 14,623 14,623
Actuarial loss on retirement benefit obligations - - - - - - (280) (280)
Tax on items taken directly to equity - - - 60 - - 70 130
Fair value losses - - - (239) - - - (239)
Total comprehensive income for the year - - - (179) - - 14,413 14,234
Sale of treasury shares - - - - 3,134 - (2,874) 260
Repurchase of own shares - - - - - - (10,641) (10,641)
Cancellation of repurchased shares (1,740) - - - - 1,740 - -
Dividends paid - - - - - - (6,473) (6,473)
Share based payments charge - - - - - - 2,602 2,602
As at 28 February 2026 31,270 124,939 10,645 (99) (1,678) 8,457 183,999 357,533
The other reserve is a merger reserve, arising from shares issued as
consideration to the former shareholders of acquired companies.
The treasury share reserve relates to shares acquired by Ocorian Limited, the
Trustee of Vertu Motors plc's Employee Benefit Trust ("EBT"). The shares were
purchased by the Trustee to be held for the purposes of the EBT and may be
used to transfer shares to individuals when options are exercised. This could
include the Company Share Option Plan ("CSOP") or Partnership Share Options
("PSO"), under which each of the Executive Directors of the Company, the
Company's other PDMRs and certain other senior managers are potential
participants and is therefore regarded as having a notional interest in these
shares.
During the year, 5,075,713 shares were transferred from the EBT on exercise of
vested CSOP and PSO awards. 2,717,292 shares remain in the EBT at 28 February
2026.
All issued shares are fully paid.
For the year ended 28 February 2025
Ordinary Share Other Hedging reserve Treasury share Capital redemption reserve Retained Total
share capital premium reserve 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 year - - - - - - 18,103 18,103
Actuarial losses on retirement benefit obligations - - - - - - 1,471 1,471
Tax on items taken directly to equity - - - 47 - - (368) (321)
Fair value gains - - - (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 year ended 28 February 2026
1. Basis of preparation
Vertu Motors plc is a Public Limited Company which is listed on the AiM market
and is incorporated and domiciled in England. 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.
Whilst the financial information included in this announcement has been
computed in accordance with UK IFRS, this announcement does not itself contain
sufficient information to comply with UK IFRS. The Group audited
consolidated financial statements that comply with IFRS will be published on
the Group's website, www.vertumotors.com (http://www.vertumotors.com) .
The financial information presented for the years ended 28 February 2026 and
28 February 2025 does not constitute the Company's statutory accounts as
defined in Section 434 of the Companies Act 2006 but is derived from those
financial statements. The auditors' reports on the 2026 and 2025 financial
statements were unqualified. A copy of the statutory accounts for 2025 has
been delivered to the Registrar of Companies. Those for 2026 will be
delivered following the Company's annual general meeting, which will be
convened on 24 June 2026.
Going concern
The consolidated financial statements have been prepared on the going concern
basis under the historical cost convention, as modified by the revaluation of
financial assets and liabilities (including derivative financial instruments)
at fair value.
In order to prepare the financial statements on the going concern basis, the
Directors have considered detailed financial projections for a period of 12
months from the date of signing the financial statements ('Review Period').
These projections are based on the Group's detailed annual business plan for
the year ending 28 February 2027 as well as the known financial performance of
the Group in the period subsequent to 28 February 2026, projected forward to
cover the Review Period ("Base Case"). The Directors have considered these
financial projections in conjunction with the Group's available facilities.
The Directors have also considered sensitivity analysis performed in respect
of these forecasts to model the impact of various severe but plausible
downside scenarios including reduced volume of new and used car sales, reduced
demand from aftersales customers and further increases in the Group's
operating cost base. This analysis did not indicate any issues with the
Group's ability to operate within its banking facilities during the Review
Period.
Based on the forecast information available and the sensitivity analysis
performed as set out above, the Directors believe it is appropriate to prepare
these financial statements on the going concern basis.
Accounting policies
The annual consolidated financial statements of Vertu Motors plc are prepared
in accordance with UK IFRS.
The accounting policies adopted in this report can be found on our website,
www.vertumotors.com (http://www.vertumotors.com) , and are consistent with
those of the Group's financial statements for the year ended 28 February 2025.
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.
Year ended 28 February 2026
Gross
Revenue Gross Profit Gross Margin
Revenue Mix Profit Mix
£'000 % £'000 % %
Aftersales (*) 434,165 9.0 250,241 46.3 44.4
Used cars 1,929,762 39.9 132,575 24.6 6.9
New car retail and Motability 1,375,882 28.5 105,012 19.4 7.6
New fleet and commercial 1,093,987 22.6 52,181 9.7 4.8
4,833,796 100.0 540,009 100.0 11.2
Year ended 28 February 2025
Gross
Revenue Gross Profit Gross Margin
Revenue Mix Profit Mix
£'000 % £'000 % %
Aftersales (*) 417,799 8.8 236,145 44.3 43.7
Used cars 1,851,429 38.9 130,886 24.6 7.1
New car retail and Motability 1,439,922 30.2 110,174 20.7 7.7
New fleet and commercial 1,054,776 22.1 55,729 10.4 5.3
4,763,926 100.0 532,934 100.0 11.2
(*) Margin in aftersales expressed on internal and external revenue. A
significant part of the role of the service department is to support the
vehicle sales department and therefore internal revenue is considered to be an
important element of margin for the purpose of monitoring departmental
performance.
2. Non-underlying items
2026 2025
£'000 £'000
Redundancy costs 1,871 2,817
Other site closure costs 1,132 106
Property remediation works 700 -
Impairment of goodwill 609 -
Impairment of property, plant and equipment 454 524
Impairment of right-of-use assets 351 -
Profit on disposal of business (310) -
Profit on sale of assets previously held for sale (579) -
Rebrand costs - 794
Acquisition costs - 328
Non-underlying loss before tax 4,228 4,569
Tax on non-underlying items (789) (929)
Non-underlying loss for the year attributable to equity holders
3,439 3,640
The Group have undertaken a redundancy and headcount rationalisation programme
as the Group again sought to reduce its cost base, resulting in a reduction of
approximately 280 colleagues, supported by increased productivity through
continued technology deployment. The associated termination costs of
£1,871,000 have been included in non-underlying costs due to the scale and
nature of this initiative.
Part of this cost reduction exercise included the closure of sites with lower
than required financial returns, any associated redundancy costs with site
closures are included within redundancy costs. Other site closure costs
included onerous lease and business rates provisions for void periods,
dilapidations provisions and other associated costs with exiting these sites.
Costs of £1,132,000 have been included in non-underlying costs.
A provision has been recognised in non-underlying items for £700,000 for
property remediation following a significant failure of the roof at one
dealership with expert reports obtained and the estimated cost of remediation
provided for.
Impairment charges of £609,000 relating to goodwill were recognised as the
goodwill in respect of two of the Group's Motorrad bike businesses were fully
impaired, where outlet performance had been poor. Property, plant and
equipment and right-of-use assets were impaired relating to two locations
where franchise representation has changed and forecast financial returns
triggered an impairment.
The Group disposed of its Honda dealership in Huddersfield in the year
generating a profit on disposal of £310,000. Additionally, freehold
properties that were previously held for sale and were sold in the year
generated a profit on disposal of £579,000. These profits have been included
in non-underlying items.
Non-underlying items are presented separately in the Consolidated Income
Statement to enhance comparability of trading performance between periods.
3. Finance income and costs
2026 2025
£'000 £'000
Interest on short-term bank deposits 1,134 983
Net finance income relating to defined benefit pension scheme 209 120
Finance income 1,343 1,103
Bank loans and overdrafts (9,534) (10,277)
Vehicle stocking interest (9,296) (9,853)
Lease liability interest (4,529) (4,060)
Finance costs (23,359) (24,190)
4. Taxation
2026 2025
£'000 £'000
Current tax
Current tax charge 5,841 5,896
Adjustment in respect of prior years (658) (943)
Total current tax 5,183 4,953
Deferred tax
Origination and reversal of temporary differences 51 1,409
Adjustment in respect of prior years 385 285
Total deferred tax 436 1,694
Income tax expense 5,619 6,647
2026 2025
£'000 £'000
Profit before taxation 20,242 24,750
Profit before taxation multiplied by the rate of corporation tax in the UK of 5,061 6,188
25% (2025: 25%)
Non-qualifying depreciation 1,073 939
Non-deductible expenses 637 513
Lease accounting timing difference (246) 59
Property adjustment (348) (323)
Permanent benefits (285) (71)
Adjustments in respect of prior years (273) (658)
Total tax expense included in the income statement 5,619 6,647
A summary of the Group's tax expense in respect of underlying and
non-underlying items is as follows:
Non-underlying items 2026 Non-underlying items 2025
Underlying items 2026 Total Underlying items 2025 Total
2026 2025
£'000 £'000 £'000 £'000 £'000 £'000
Profit / (loss) before tax 24,470 (4,228) 20,242 29,319 (4,569) 24,750
Taxation (6,408) 789 (5,619) (7,576) 929 (6,647)
Profit / (loss) after tax 18,062 (3,439) 14,623 21,743 (3,640) 18,103
Effective tax rate 26.19% 27.76% 25.84% 26.86%
The Group's underlying effective rate of tax is 26.19% (2025: 25.84%) which is
broadly in line with the standard rate of corporation tax in the UK.
The overall effective tax rate of 27.76% includes tax on non-underlying items
(2025: 26.86%).
5. 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 year or the diluted weighted average number of ordinary
shares in issue during the year.
For the purposes of calculating the weighted average shares in issue, shares
held by the Group's employee benefit trust are excluded as rights to dividends
on such shares have been waived.
Details of the shares held in the Group's employee benefit trust are included
in the notes to the consolidated statement of changes in equity.
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 at 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 set out above, is compared with the number
of shares that would have been issued assuming the exercise of the share
options.
Underlying earnings per share is calculated by dividing underlying earnings
attributable to equity shareholders by the weighted average number of ordinary
shares in issue during the year.
2026 2025
£'000 £'000
Profit attributable to equity shareholders 14,623 18,103
Non-underlying loss after tax (note 4) 3,439 3,640
Underlying earnings attributable to equity shareholders 18,062 21,743
Weighted average number of shares in issue ('000s) 316,461 330,599
Potentially dilutive shares ('000s) 24,346 24,117
Diluted weighted average number of shares in issue ('000s) 340,807 354,716
Basic earnings per share 4.62p 5.48p
Diluted earnings per share 4.29p 5.10p
Basic underlying earnings per share 5.71p 6.58p
Diluted underlying earnings per share 5.30p 6.13p
6. Dividends per share
Dividends of £6,473,000 were paid in the year ended 28 February 2026 (2025:
£7,954,000), 2.05p per share (2025: 2.40p).
A final dividend of 1.15p per share is to be proposed at the Annual General
Meeting on 24 June 2026. The ex-dividend date will be 25 June 2026 and the
associated record date 26 June 2026. The dividend will be paid, subject to
shareholder approval, on 24 July 2026 and these financial statements do not
reflect this final dividend payable.
7. Reconciliation of net cash flow to movement in net debt
2026 2025
£'000 £'000
Net increase in cash and cash equivalents 429 2,048
Cash inflow from proceeds of borrowings - (12,526)
Cash outflow from repayment of borrowings 5,126 8,097
Cash movement in net debt 5,555 (2,381)
Borrowings acquired - (10,569)
Capitalisation of loan arrangement fees - 520
Amortisation of loan arrangement fees (306) (246)
Decrease in accrued loan interest 3 88
Non-cash movement in net debt (303) (10,207)
Movement in net debt (excluding lease liabilities) 5,252 (12,588)
Opening net debt (excluding lease liabilities) (66,567) (53,979)
Closing net debt (excluding lease liabilities) (61,315) (66,567)
Lease liabilities at 1 March (94,011) (82,924)
Capitalisation of new leases (35,142) (32,277)
Disposal of lease liabilities 8,863 1,236
Interest element of lease repayments (note 3) (4,529) (4,060)
Cash outflow from lease repayments 26,868 24,014
Lease liabilities at 28 February (97,951) (94,011)
Closing net debt (including lease liabilities) (159,266) (160,578)
8. Business combinations
On 1 March 2025, the Group acquired the entire issued share capital of The
Union Motor Company Limited. Total consideration (net of cash acquired) of
£426,000 was settled from the Group's existing cash resources.
On 1 November 2025, the Group acquired the trade and assets of a Skoda
dealership in Leicester from Marshall Motor Group. Total consideration of
£605,000 was settled from the Group's existing cash resources.
On 20 February 2026, the Group disposed of the trade and assets of its Honda
dealership in Huddersfield to Riverside Motors. Consideration of £973,000 was
received in cash on completion.
9. Post balance sheet events
On 5 March 2026, the board agreed a further share buyback programme running to
28 February 2027, for an amount up to £12,000,000.
On 27 March 2026, the Group disposed of a surplus property held for sale
located in Barnstaple. The disposal generated cash proceeds of £1,510,000 at
above net book value.
Subsequent to 28 February 2026, the employee benefit trust was requested to
purchase shares up to £4m by the Company. The Trustee continues to action
this order and as at 30 April 2026 held 5,809,133 shares.
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