Deal-hungry automotive retailer Vertu Motors (VTU:AIM) rises 1.5% to 64.95p as a strong pre-close trading statement flags further trading acceleration. The UK's sixth biggest car retailer pleases with news that results for the year to February will beat expectations amid buoyant market conditions and a boost from acquisitions.


Web chart - Vertu Motors - March 14

Ahead of full-year figures (7 May), the long-standing Shares favourite says its annual performance will beat market forecasts, news sure to trigger another round of forecast upgrades for a business motoring on all fronts. Like-for-like new car volumes grew 21.5% over the five months to end-January, ahead of 14.8% growth for the wider UK market, while used car volumes advanced 11.1%.


Including recent acquisitions, new car sales volumes sped 41.6% in the five month period as Vertu continued to take market share and expand margins on new car transactions. Significantly, the £220 million cap, trading under brands including Bristol Street Motors, Vertu, Farnell Land Rover and Macklin Motors, also says new car orders for March, the key month for motor traders due to the registration plate change, are ahead year-on-year.


Vertu is profiting from gradual improvements in UK consumer confidence as well as overcapacity in the European car market. Weakness in the wider Eurozone continues to prompt major manufacturers to redirect stock to the UK and stimulate the British motor market with compelling, finance-led offers.


Chief executive officer Robert Forrester, who floated the 'buy-and-build' vehicle on Aim back in 2006, remains on the hunt for acquisitions in what remains a highly-fragmented market. The operationally-geared retailer has plenty of firepower for acquisitions with £25.7 million net cash in the coffers at last count and has proven its ability to snap up and revive underperforming dealerships.


Vertu is on the lookout for deals to supplement organic growth in both the premium and volume segments of the market and the well-regarded Forrester insists 'a strong pipeline of such opportunities remains in place'. With the existing business powering ahead and more to come from potential M&A, analysts are expected to keep revising forecasts upwards.

Issue Date: 03 Mar 2014