Vertu Motors has reported strong performance in its used automobile and aftersales segments, despite a challenged latest automobile environment.
The dealership group, which operates 192 sales and aftersales outlets nationwide, provided a trading update for the five months ending 31 July, ahead of its interim results expected in October.
Vertu said it anticipates that its full-year FY25 adjusted profit before tax can be according to market expectations although profits for the primary half of the yr are expected to be lower than the previous yr,
The anticipated improvement within the second half can be driven by a stronger used automobile market and enhanced vehicle trade values.
Vertu Motors recorded a 5.0% increase in like-for-like used vehicle sales volumes, with gross margins rising to 7.2%.
This growth is basically on account of stable used vehicle values within the UK, which have been bolstered by constrained supply.
“A weaker latest retail market has led to reduced numbers of three- to five-year-old used vehicles coming partly exchange whilst increasing supply of nearly latest vehicles from demonstrator and pre-registration channel is obvious,” it said.
“Reduced overall used vehicle supply should proceed to underpin residual values and subsequently wholesale price stability within the months ahead, supporting used automobile margins.”
It said it had exploited real time pricing algorithms to have the option to react quickly to market conditions to optimise volume and margin and speed of inventory turn.
The corporate’s aftersales operations also performed robustly, with revenue and gross profit increasing across all areas. This success is attributed to the next variety of technicians and the effective execution of the group’s vehicle health check system.
In contrast, the group’s latest retail vehicle sales volumes declined by 5.8% throughout the period.
Nonetheless, it identified that this still outperformed the broader UK market, which saw a 12.1% drop on account of weakening demand.
“The UK latest automobile market is increasingly driven by Fleet and Motability channels, which made up almost 60% of all latest vehicle registrations within the period, in comparison with 52% in 2023, “ it adding, noting that manufacturers are increasingly turning to such lower margin channels in an effort to shift stock.
Despite these challenges, Vertu continued its strategic expansion.
In July, its Peugeot franchise opened in Carlisle, alongside the group’s existing Vauxhall, MG, SEAT and Cupra dealerships.
In August, the primary of the Group’s BYD outlets opened in Worcester, its Ford and Citroen dealerships. An additional two BYD outlets are expected to open in the approaching months. The group opened its first flagship outlet for Ducati motorbikes in Sunderland.
The corporate said its strong balance sheet provided it with the pliability to pursue further growth opportunities and make strategic investments.
Looking ahead, Vertu said it remained optimistic about its long-term prospects. The used automobile market is anticipated to stay stable, supported by lower rates of interest and constrained supply, which should help maintain strong margins.
The corporate will announce its interim results for the six-month period ending 31 August on 16 October.
Robert Forrester, chief executive of Vertu Motors said: ‘’I’m pleased with the group’s performance against a fast-shifting market backdrop. Our high margin, resilient aftersales business continues to thrive aided by higher technician numbers and robust execution of the group’s vehicle health check process.
“The retail latest automobile market stays weaker because the Government’s regulation to transition to battery electric vehicles causes market volatility and negative impacts. The present dislocation available in the market presents opportunities for Vertu Motors to capitalise on, assessed using strict investment return metrics, with our strong balance sheet providing financial flexibility, a wonderful portfolio of strong brands, robust and scalable systems, and a powerful and experienced leadership team with motivated colleagues.”
This Article First Appeared At www.am-online.com
