Vertu Motors hikes dividend as takeovers drive bumper first half
- Vertu reported revenue jumped by 21.1% to £2.42bn in the first half of the year
- Trade benefited from higher car purchases and elevated average vehicle prices
- The Gateshead-based company’s takeover of Helston Garages is its largest ever
A series of acquisitions made by Vertu Motors last year has helped the firm score record first-half sales.
Britain’s third-largest automotive dealer reported revenue growth of 21.1 per cent to £2.42billion for the six months ending August, with takeovers contributing more than 60 per cent of growth.
The performance has driven Vertu’s board to propose a 21.4 per cent hike in its interim dividend to 0.85p per share.
Good performance: Vertu Motors reported revenue jumped by 21.1 per cent to £2.42billion for the six months ending August, with takeovers contributing more than 60 per cent of growth
Almost £250million of increased turnover in the half came from Helston Garages, which became Vertu’s largest-ever acquisition when it was bought in December 2022 for £182million.
The transaction has significantly expanded the Gateshead-based group’s presence across South West England, while also adding Volvo and Ferrari cars to its portfolio.
A further sales boost was provided by the business becoming the UK’s largest BMW motorbike seller when it acquired two outlets in Yorkshire from the Saltaire Motor Company.
Vertu sold 95,409 cars in the first half, an 11.4 per cent year-on-year rise.
Used vehicle revenues rose by just 10.9 per cent to £947.8million, but purchases of new motors climbed by approximately a third to £744million.
Trade further benefited from elevated average vehicle sales prices, which have soared since the beginning of the coronavirus pandemic.
This has primarily been caused by the release of pent-up demand after lockdown curbs started being loosened in mid-2021 and semiconductor shortages affecting the production of new motors.
Secondhand car prices remain about 25 per cent higher than in January 2021, even though the average cost of used electric vehicles has slumped over the past year.
The combination of higher prices and unit sales helped the London-listed firm’s pre-tax profits grow by 11.9 per cent to £31.5million,
Despite major cost-of-living pressures hitting British consumers, Vertu said it delivered a robust performance in September, buoyed by an improving supply of vehicles, and predicts profits for the year ending February 2024 to be in line with forecasts.
Vertu bosses said: ‘Future consumer confidence levels will be key in determining future retail vehicle demand, and the board remains cautious in this regard.
‘The board believes that the group is very well positioned to deliver on its stated strategy and to take advantage of the increasing opportunities in the UK sector, with a good pipeline of bolt-on acquisitions.’
Vertu Motors shares were 2.1 per cent, or 1.5p, higher at 71.6p on early Wednesday afternoon, meaning they have expanded by 36 per cent since the year began.