Vertu Motors ups FY profit guidance, highlights strong used car market
Vertu Motors said on Wednesday that in light of its strong performance to date, it now expects full-year profit to beat current expectations.
The company, which operates under the Bristol Street Motors, Vertu, Farnell and Macklin Motors brand names, pointed to a continuation of the strong trading trends seen in March and April.
As a result of the solid trading, which has been driven largely by the "exceptional" used car market environment, it now expects adjusted pre-tax profit to be above current expectations and in the range of £28m to £32m. It had previously guided to profit of between £24m and £28m.
It did, however, caution over risks to the rest of the financial year due to Covid-19 disruption and vehicle supply constraints. A tightening of new vehicle supply, largely reflecting component shortages flagged in the year-end announcement, is increasingly apparent, Vertu said.
"The expected time between order and delivery of new vehicles to customers for certain of the group's franchises is now seeing elongation.
"The used car market remains very robust from a demand perspective. The reduction in new car supply is contributing to a reduced supply of used vehicles, with a resultant exceptional wholesale pricing environment."
Nevertheless, the company said it remains confident in its prospects.
"With its strong asset base, scale, manufacturer relationships, well invested systems including the Click2Drive sales technology platform and experienced leadership team, the board believes that the group is strategically very well placed to capitalise on the changes and opportunities in the UK motor retail sector."