01/09/2010
Vertu gears up for profits leap
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Car dealership Vertu Motors has said half-year profits were expected to be "materially" ahead after revving up sales of new and used cars. The Newcastle group has seen a 6.7% leap in like-for-like sales volumes of new cars in the five months to July, with used car sales up 5.2%. Shares surged 6%. Vertu, which is the UK's eighth largest motor dealership, said the sales rise came despite the end of the "cash for bangers" scrappage scheme, which saw demand for new cars tail off in recent months. But the used car sector has been boosted as a result, with more second hand motors now coming on to the market. Demand for car parts is also picking up as drivers seek to keep their existing motors on the road. Vertu said its parts division had delivered a "very strong performance", helping buoy its overall aftersales business. Service and bodyshop sales lifted 2.4% and 2.1% on a like-for-like basis, while cost control is also supporting profit margins, said Vertu. The group, which launched in 2006 with aims to grow by acquisition, snapped up another eight outlets in the half year. Further acquisitions are also on the horizon, with Vertu saying it was looking at a number of deals and "growth opportunities". But despite the better-than-expected first half, the firm held full-year profits guidance and said it was cautious over the remainder of the year. It said: "Following this encouraging start to the financial year, the group is in a strong financial position and has made significant strategic progress. However the macro-economic outlook continues to appear fragile and the board therefore remains cautious on the second-half trading outlook."
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