F&I Management & Training

Vertu Motors defied the downturn in the car retailing sector with a rise in profits for the six months to the end of August and restated its intention to grow by further acquisitions.

The group, which trades as Bristol Street Motors and is rated 11 in the Motor Trader Top 200, posted a £1.9m pre-tax profit on revenues of £423m.

Both figures were significantly up on its inaugural reporting period which spanned the 10 months from 1 November 2006 - when Vertu was formed as a buying vehicle - and included the period from 27 March when trading commenced with the acquisition of Bristol Street, through to 31 August 2007. Revenues for that period were £290.3m with a loss of £0.4m.

The group saw new retail car sales rise by 13.5 per cent on a like-for-like basis in a market which fell by 7.3 per cent. While used volumes rose by 15.1 per cent in its franchised dealerships they fell by 8.8 per cent in its Motor Nation car supermarket outlets. Here operating profit fell from breakeven to a loss of £0.1m and resulted in the group closing the "significantly loss making" Coventry Motor Nation site at the beginning of September.

"The group has delivered a performance which is above last year's profit level on a pro-forma basis and the group has continued to gain market share with strong new and used like-for-like volume growth," said chief executive Robert Forrester.

Forrester also said the group had performed well during last month's plate change when the market fell by 21.2 per cent.

"The UK economic environment is increasingly challenging for the motor industry as a whole, however, despite this economic backdrop, we have maintained tight cost control over the business and continued to outperform the market in September.

"We continue to anticipate further market weakness as the consumer adjusts to the economic environment," he said.

Forester confirmed the group is planning further growth by acquisition.

"The board is committed to an acquisition strategy to grow the market share of the group's operations in order to enhance shareholder value.

"The board believes that acquisition opportunities, and the value to be created from them, will increase as the current economic slowdown progresses," he said.

DATED: 22.10.08

FEED: MT