Pre-close Trading Update
Vertu Motors PLC
05 March 2008
Vertu Motors plc ('Vertu' or the 'Group')
Pre-close Trading Update
5 March 2008
Vertu Motors plc, the UK's 10th largest motor retail group, is pleased to
provide the following trading update.
Following the completion of the financial period ended 29th February 2008, the
Board can confirm that the trading performance of the Group is in line with
market expectations.
The Group continues to expand and, on 1 March 2008, it opened a new Bristol
Street Motor Nation used car outlet in Doncaster. We continue to look at
expansion opportunities across all of our core businesses of car and commercial
franchise operations and used car outlets.
The new car market has remained resilient in the second half of 2007 and into
2008, despite the perceived weakening in the underlying consumer environment.
National new car registrations to private buyers in the September to January
period rose 0.8% compared to the prior year. On a like-for-like basis for
Bristol Street Motors' dealerships, new car volumes sold to private customers
rose 10.3%. This growth reflected strong consumer offers and incentives to
dealers by manufacturers, coupled with improvements in business processes in the
sales arena.
The used car market remains stable with residual value trends in line with
previous years, except for the nearly new market, which continues to be impacted
by the strength of the new car offers. On a like-for-like basis for Bristol
Street Motors' dealerships for the period September to January, used car volumes
increased by 29.4% year on year. The launch of a new internet proposition on 1
October 2007 has been a contributor to delivering this sales growth. It is the
strategy of the Group to increase sales of used vehicles at each franchised
outlet so as to build an increased vehicle parc with which to increase the
higher margin aftersales business. Used vehicle margins have continued to be at
lower levels than historically achieved by the business as the Group increases
the volumes of vehicles sold.
Like-for-like used car volumes in the Bristol Street Motor Nation used car
outlets rose 2.0% in the September to January period. The strategy in the
Bristol Street Motor Nation business has been to reduce stock levels whilst
seeking to maintain sales so as to improve stock turn and financial returns.
The overall commercial vehicle market has seen growth in registrations in the
period since 1 September 2007 in both the light and heavy vehicle sectors.
Order levels have improved, particularly in the heavy vehicle sector. Long lead
times, due to supply constraints, are a current feature of the market.
Outlook
The first month of the new financial year is March and this reflects the largest
single month for vehicle sales and dealership profitability in the year. New
car order levels coming into this crucial month remain on plan. Sales in the
remainder of the month are, however, important for the Group.
Whilst the Group is aware of the challenging market conditions in the UK, it
looks forward to continuing to gain market share and to delivering against its
stated strategy in the year ahead.
- Ends -
For further information please contact:
Robert Forrester, CEO, Vertu Motors plc, Tel: 0191 206 4617
Karen Anderson, FD, Vertu Motors plc, Tel: 0191 298 6514
Andrew Kitchingman, Brewin Dolphin Securities, Tel: 0845 270 8613
Billy Clegg/Edward Westropp, Financial Dynamics, Tel: 020 7831 3113
Notes to editors
Vertu Motors is the 10th largest motor retailer in the United Kingdom with 47
dealerships forming a national network across England, operating under the
Bristol Street Motors and Bristol Street Motor Nation brands. Manufacturing
partners include Citroen, Ford, Iveco, Honda, Peugeot, Renault, Vauxhall, Fiat
Commercials and Hyundai.
Vertu Motors was established in November 2006 with the aim of consolidating the
UK motor retail sector. The company listed on AIM in December 2006 and raised
£25m. The Executive Directors are experienced within the sector, having
previously held senior positions within Reg Vardy.
In March 2007, the Group acquired the 13th largest motor retailer in the United
Kingdom, Bristol Street Motors. In the summer of 2007, Vertu acquired Blake
Holdings, Grantham Motor Company Limited and a Ford dealership in Morpeth,
Northumberland. In March 2008 the Group opened a new Bristol Street Motor
Nation outlet in Doncaster.
It is intended that the Company will continue to acquire motor retail operations
in the form of franchised dealerships and used car only operations. The
Company's acquisition strategy is supplemented by a focused organic growth
strategy to drive operational efficiencies through the national network.
www.vertumotors.com
This information is provided by RNS
The company news service from the London Stock Exchange
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