Vertu Motors has seen trading profits increase in the three-month period to May 31 this year due to its £117m acquisition of Helston Garages at the end of last year.
The business said trading profits are above prior year levels, “despite continued inflationary-driven cost headwinds”.
The 189 site-strong top five AM100 group is expecting its full year results for 2023 to be in line with expectations in an announcement to the market as part of its annual general meeting trading update.
Vertu acquired 28 franchised sales outlets from Helston, with brands including BMW/Mini, Ferrari, Jaguar Land Rover, Peugeot and Volvo in a move that added significant scale and geographic coverage of the South West to the group’s existing footprint of outlets.
In the new retail and Motability channel, like-for-like volumes grew 10.8% with Vertu’s group performance comparing favourably with the UK market that grew 8% over the same period.
Like-for-like new vehicle margins have remained strong at 7.9% (8.0% last year) despite the higher Motability mix which is at a lower margin.
Used car price stability expected to remain
The UK used vehicle market remains resilient, while continued stability of used vehicle prices is exhibited.
Vertu’s average used vehicle selling price per unit grew by 3.4% on a like-for-like basis to over £21,000.
Like-for-like gross profit per used unit sold was stable at £1,648 (£1,652 last year). Gross margin was 7.8% (8.1% last year), reflecting continued higher selling prices.
Fleet and commercial vehicle like-for-like volumes saw slight growth of 1.0%, with Vertu choosing to focus on profitable fleet sales channels, rather than the high growth, but low margin rental segment.
Services revenues increased by 4% on a like-for-like basis for the same period compared to prior year.
While gross profit increases were seen in all aftersales channels on a like-for-like basis, gross margins for aftersales declines “as expected” due to higher technician salary costs.
Vertu said technician capacity remains “a continued constraint on revenue growth” in service with new training and recruitment initiatives being planned to help address this concern.
Robert Forrester, Vertu Motors chief executive, said: “I am pleased to report that trading remains positive.
“The entire, recently enlarged, Vertu team has put in hard work and dedication once again, and I would like to thank them all. Used car pricing has remained firm and we have gained market share in the new car market. The performance of our high margin aftersales business has remained strong.
“The integration of Helston Garages is progressing well and is on track to deliver the planned synergies. We are excited about the opportunities our enlarged portfolio will create for Vertu Motors.”
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