Vertu Motors profit dips but beats expectations

Vertu Motors said on Wednesday that its chairman was stepping down as it reported a drop in full-year pre-tax profit.

In its final results for the year to 28 February 2019, the automotive retailer said adjusted pre-tax profit was ahead of market expectations at £23.7m, but down from the previous year's £28.6m.

Total group revenue during the year was up 6.7% to £2.98bn, while like-for-like revenue was 5.1% higher.

Like-for-like revenue from the used car segment was up 11.6%, while aftersales LFL revenue grew 8.8% and new car revenue edged up 2.9%. On the downside, revenue from fleet and commercial declined 3.9% on a LFL basis.

The full-year dividend was lifted 6.7% to 1.6p a share.

The company said it had achieved a "credible" result in profit terms as the automotive retail sector faced a number of challenges, including disruption to new vehicle supply due to a weaker pound and EU Worldwide Harmonised Light Vehicle Test Procedure regulations. It also pointed to the impact of political uncertainty on consumer confidence and "significant" cost pressures.

Chairman Peter Jones announced that he would be stepping down from his role in the coming months, "having overseen a number of board changes in the last 18 months and with the group in an excellent position and poised for further growth".

Chief executive officer Robert Forrester said: "Our highly skilled, disciplined and motivated team offers our aftersales, used and new vehicle customers outstanding service. By executing the basic fundamentals well, and with our strong financial position, Vertu will continue to generate significant and growing levels of cash.

"Over the last three years, we have invested over £85.0m in our capex programme across our dealership estate. This programme is now coming to an end and we would expect to generate increased levels of cash which, through our disciplined capital allocation framework, we will invest in operations, acquisitions and dividends as well as share buybacks, where appropriate."

At 1330 BST, the shares were up 0.9% at 35.30p.