Shares in car dealership Vertu Motors (VTU:AIM) surged 11% to 24.2p on Thursday after the company said that strong trading had continued into July as it experienced a robust recovery in demand for its vehicles and servicing.
ON THE ROAD TO RECOVERY
In today’s annual general meeting (AGM) update, chief executive Robert Forrester commented: ‘A very successful 0% finance used vehicle sale event was executed in a majority of the group’s English dealerships and this, together with strong used car margins, aided the delivery of a record month for used car profits.’
Pre-tax profits for July reached £7.4 million and including the pre-tax loss of £5.2 million for the March to June period, the year-to-date profit sits at £2.2 million.
Like-for-like volume growth of 13.7% in used vehicles produced record gross profits as margins remained above normal levels.
National new car registrations saw their first meaningful growth in 17 months with volumes up 18.1% over the last year and the crucial September month order intake was said to be 20% ahead year-on-year.
Detracting from the strong retail segments was the fleet business where corporate contract hire and daily rental were more subdued resulting in a 24.4% drop in July like-for-like revenues.
Overall consumer demand has been stronger than the Newcastle-headquartered company anticipated during the lockdown and management are eyeing further growth opportunities to add scale to the group’s franchise dealerships which include Bristol Street Motors, Farnell, Macklin Motors and Vertu Motors.
Despite the encouraging trends seen since reopening, the company refrained from providing guidance for the full-year to 29 February 2021, citing continued uncertainty. The interim results will be announced on 7 October.
