Vertu Motors has reported increased revenue but a drop in profits in its latest full-year financial results.
The AM100 dealer group’s results for the 12 months ending February 28 2026 show revenue of £4.83 billion, up from £4.76 billion within the previous 12 months.
Nevertheless, adjusted profit before tax of £24.5 million is down by £4.8 million year-on-year.
Ensure you usually get AM insight. Make us a preferred source of stories on Google.
In its results, Vertu states that this profit – which it notes is barely ahead of analyst expectations – was delivered despite “weak recent vehicle markets”, which it attributes to the UK Government’s ZEV mandate and “related margin pressure”.
ZEV mandate ‘getting worse’
Robert Forrester, CEO at Vertu Motors, has previously discussed difficulties caused to the brand new automobile market by the ZEV mandate, and chatting with Automotive Management in regards to the newly published results he said the consequences were worsening.
He said: “It’s got worse, since the goal’s gone up. And next 12 months it would worsen since the goal goes up.
“Ultimately, I’m a little bit bit more relaxed on the ZEV mandate because the fact is dawning, and there may have to be moderation and alter: move the targets out to 2035 or 2040, align more with the European Union, just bring reality back into the world.
“From the discussions that I’ve had, there may be a recognition, definitely within the business department of the Treasury, that economic growth and activity is being curtailed, and there is an excessive amount of pressure on the automotive sector.
“I believe government gets it. But having had a really vocal strategy, government might find it quite difficult to row back. But they’ll should – and so they know, I believe, that they’re going to should.”
Forrester said that a discount in Vertu’s workforce by nearly 600 employees up to now 24 months may very well be attributed to the ZEV mandate, “aided and abetted” by increases within the National Minimum Wage and National Insurance.
He said: “I believe we could have probably weathered National Minimum Wage and National Insurance so much higher had we not lost £20 million of recent automobile profitability up to now 24 months.”
Acquisition opportunities and aftersales success
Despite the pressures, Forrester says Vertu is well placed to make the most of opportunities that may very well be presented by a consolidating sector. The group has reported a discount in net debt by £5.3 million to £61.3 million, and “robust” money generation, with £30.7 million of free money flow.
Forrester said: “We now have a really strong balance sheet, which we are going to use sooner or later to consolidate more and buy more assets.
“Whether the time’s right with the economic uncertainty, with the ZEV mandate in place, is debateable, but I believe there may be some evidence that individuals are going to struggle going forward, especially in the event that they’ve got a lot of debt, and due to this fact there may very well be some interesting opportunities for us.
“We have got scale now, but I believe we have the management, the financial capability, the systems capability, the ambition to do more. It’s a matter of timing and buying the proper assets. A matter of price, franchise, geography, all these items.”
A highlight of the group’s financial performance is aftersales, which has seen like‑for‑like revenue and gross profit growth and now generates greater than 46% of the group’s gross profit.
Forrester said: “Aftersales clearly underpins our earnings. If we didn’t grow those aftersales profits, the numbers would have been back so much more.”
Forrester highlighted efficiencies including the closure of many service departments on Saturdays, and highlighted an upsurge in demand for tyres attributed to worsening road surfaces.
He also said the group’s strategy referring to SMART repair and margin management had led to increased profits from accident repairs, despite reductions within the variety of accidents resulting from the increased rollout of ADAS.
JLR losses mitigated and Chinese brand expansion planned
The group had previously warned of a financial impact from last 12 months’s JLR cyber-attack, defined in the outcomes as being price £3.9 million – nevertheless this was mostly covered by insurance proceeds of £3.4 million.
The outcomes also note “modest” used automobile profit growth, with pricing stability and stable gross profit per unit.
The group has also reported strong trading in March and April, said to have been ahead of the identical period in 2025.
Vertu can also be planning to proceed a programme of adding Chinese brands to its portfolio, with Jaecoo, Omoda, Lepas, Chery and Leapmotor announced as recent additions.
When asked if these additions would replace other manufacturers in Vertu’s portfolio, Forrester said: “I believe it is a gradual alternative, but not a complete alternative. It’s more a rebalancing.
“Chery’s brands have set off exceedingly well within the UK. We’ve got good relations with them. We’re now actively putting those brands into some dealerships.
“We now have no plans to exit any of the prevailing franchises we have.”
This Article First Appeared At www.am-online.com
