Vertu Motors of Gateshead ups revenue 17% to £4.7bn

Vertu CEO Robert Forrester

Gateshead-based Vertu Motors plc said its revenue rose 17.6% to £4.7 billion and profit before tax rose 6.5% to £34.6 million in the year to February 29, 2024.

A final dividend of 1.50p per share has been recommended, bringing full year dividend to 2.35p per share, an increase of 9.3%.

Vertu said £7.5 million was returned to shareholders via a repurchase of 11.3 million shares during the year.

On its current trading and outlook, Vertu said: “Strong trading performance delivered in key months of March and April gives confidence for the new financial year …

“Used vehicle prices have been stable with volumes and margins robust in March and April. Like-for-like used car volumes grew 5.8% year-on-year and gross profit increased.

“Aftersales revenues and profits remain highly resilient and saw growth aided by retention products, such as service plans, and additional numbers of technicians recruited.

“Battery electric vehicle sales growth in the UK has stalled. Government mandated targets increase over the coming years and there is a risk the industry falls short of these targets. With the threat of significant fines on manufacturers on missing targets, the risk of potential market volatility later in the year and medium-term is elevated.

In FY25 cash proceeds from disposal of properties of £10.6m are anticipated, approximately £2.6m in excess of book value.

Group well positioned with stable management and a very strong balance sheet.

A share buyback approval for the potential purchase of shares for up to £3m has been put in place for the new financial year. Gearing limit of up to 1.5x net debt/EBITDA reconfirmed.”

Vertu Motors CEO Robert Forrester said: ”It was pleasing to see the group successfully navigating a difficult period of trading with declining used car values in the last few months of 2023.

“Used vehicle prices and margins have now stabilised and there has been strong cash generation from lower working capital reducing net debt below market expectations.

“During the year, record revenues of £4.72 billion were achieved.

“Moving to the new financial year, March and April 2024 were successful months.

“The group delivered new retail like-for-like sales volumes ahead of the market decline in March and April. This demonstrates the robustness and strength of the group’s operations.

“The group remains focused and thoughtful around capital allocation.”