Vertu Motors delivers record H1 revenues

Automotive retailer Vertu Motors has reported record revenues, year-on-year profit and dividend growth for the six months ended 31 August.

Vertu said interim revenues had grown 21% to £2.42bn, aided by acquisitions and growth in the core group, while adjusted pre-tax profits rose 11% to £31.5m. Basic adjusted earnings per share increased to 6.89p from 6.50p a year earlier and the dividend per share came in at 0.85p, up from 0.70p.

Gross margins remained broadly flat at 11%, with an increase in used vehicle gross profit per unit compared to the second half of the previous trading year.

On the other hand, the AIM-listed group swung from a net cash position of £17.8m at the halfway point of last year to a £90.7m debt position, leading to a jump in net finance costs from £6.8m to £9.9m.

Vertu added that full-year profits looked set to be in line with current market expectations and that new vehicle supply continued to improve, as has used vehicle sales volume, with prices reflecting "more normalised" depreciation patterns. High-margin after-sales demand was also said to have remained "robust".

Chief executive Robert Forrester said: "The group has delivered 11.7% year-on-year profit growth benefitting from increased scale. The consistent strategies around digitalisation, cost efficiency, smart capital allocation, and the development of our management and colleagues is providing a firm grounding to deliver value to our shareholders.

"The interim dividend increase of 21.4% shows the group's financial strength and the progress being made. Trading in the key month of September was strong reflecting the plate change in new cars."

As of 0825 BST, Vertu shares were up 1.77% at 71.34p.

Reporting by Iain Gilbert at Sharecast.com