Vertu Motors increases dividend as acquisitions boost first half of the year
- Vertu reported sales rose 21.1% to £2.42 billion in the first half of the year
- The trade benefited from higher car purchases and higher average car prices
- The Gateshead-based company’s takeover of Helston Garages is its largest ever
A series of acquisitions by Vertu Motors last year helped the company achieve record sales in the first half of the year.
Britain’s third-largest car dealer reported sales growth of 21.1 percent to £2.42 billion for the six months ended August, with acquisitions contributing more than 60 percent of the growth.
This performance has prompted Vertu’s board to propose a 21.4 percent increase in the interim dividend to 0.85p per share.
Good performance: Vertu Motors reported a 21.1 percent increase in sales to £2.42 billion for the six months ended August, with acquisitions contributing more than 60 percent of the growth
Nearly £250m of increased sales in the half came from Helston Garages, which became Vertu’s biggest ever acquisition when it was bought for £182m in December 2022.
The transaction has significantly expanded the Gateshead-based group’s presence in South West England, while also adding Volvo and Ferrari cars to its portfolio.
A further increase in sales was driven by the company becoming the largest seller of BMW motorcycles in the UK when it acquired two outlets in Yorkshire from the Saltaire Motor Company.
Vertu sold 95,409 cars in the first half of the year, an increase of 11.4 percent year on year.
Revenue from used vehicles rose by just 10.9 per cent to £947.8m, but new engine purchases rose by around a third to £744m.
Trading further benefited from higher average vehicle sales prices, which have soared since the start of the coronavirus pandemic.
This has been mainly driven by the release of pent-up demand after lockdown measures were eased in mid-2021 and semiconductor shortages affected production of new engines.
Used car prices remain about 25 percent higher than in January 2021, even as the average cost of used electric vehicles has fallen over the past year.
The combination of higher prices and unit sales helped the London-listed company’s pre-tax profits grow 11.9 percent to £31.5 million.
Despite major cost-of-living pressures hitting UK consumers, Vertu said it delivered a robust performance in September, supported by an improving vehicle supply, and forecasts profits for the year ending February 2024 to be in line agree with the predictions.
Vertu bosses said: ‘Future consumer confidence will be key in determining future demand for retail vehicles, and the board remains cautious in this regard.
‘The board believes that the group is very well positioned to deliver on its stated strategy and take advantage of increasing opportunities in the UK sector, with a good pipeline of additional acquisitions.’
Vertu Motors shares were 2.1 percent, or 1.5 cents, higher at 71.6 cents on Wednesday afternoon, meaning they have grown 36 percent since the start of the year.