Vertu Motors first-half profit £52m on £1.9bn revenue

Shares of Gateshead-based Vertu Motors plc rose about 8% on Wednesday after it announced interim results for the six months ended August 31, 2021, showing “record trading results” including adjusted profit before tax of £51.8 million (H1 FY21: £4.7m, H1 FY20: £16.9m).

Revenue grew to £1.9 billion, a rise of 16.8% compared to the pre-pandemic six month period to August 31, 2019.

Dividends have been re-established at the firm with interim payout of 0.65p per share declared.

Vertu said it now anticipates its adjusted profit before tax for FY22 will be at least £65 million, up from £50 million to £55 million.

The company said “colleague reward packages and development programmes” are being enhanced to ensure “fully resourced, stable teams are in place to deliver improvements in customer experience, retention and gross profit generation” with annualised investment of £12 million expected.

Vertu said in its outlook it recorded a record trading performance in the key month of September with a trading profit of £20 million.

However, new and used vehicle supply constraints continue with “cost pressures evident, particularly in employment costs.”

Vertu Motors CEO Robert Forrester said: “The record profitability delivered in the period has undoubtedly been aided by very favourable used vehicle market conditions, however, this is a remarkable performance outperforming market trends …

“The group has continued to evolve during the period, with further enhancement of its strategy in achieving enhanced online sales capability via the group’s Click2Drive technology platform and the introduction of a ‘concierge’ service for sales customers under the Click2Drive banner. 

“The number of sales outlets has again grown as a result of the execution of the group’s multi-franchise strategy. 

“Efficiency and productivity gains continue to be delivered through the enhanced use of technology. 

“We have again generated significant free cash flow and have a very strong balance sheet making the group very well placed to benefit from the changes and significant opportunities which are ahead of it.

“The resumption of paying dividends to shareholders shows the board’s optimism in our strategy and its execution.”