Car dealership Vertu makes a virtue of its acquisition drive
CAR DEALERSHIP Vertu has raced ahead of earnings forecasts in the year to the end of February and expects new car sales to accelerate further this year.
The firm, which has expanded from 95 to 106 showrooms across the UK in the last year, said like-for-like new car sales rose 21.5 per cent in the five months to the end of January, outpacing growth in the British new car market of 14.8 per cent.
Once acquisitions are included, Vertu’s new car sales were up a whopping 41.6 per cent.
Orders placed for delivery in March, a key month when new registration plates are released, are ahead of last year, Vertu said.
Overall margins were steady on last year, while new car margins were boosted by the purchase of Farnell Land Rover in June.
On used cars, Vertu posted an 11.1 per cent rise in like-for-like sales, or 23.4 per cent including recently-acquired businesses.
The company is weighing up a “sizeable pipeline” of new sites and companies to buy, and plans to invest in the new additions to its showrooms in the coming year.
Vertu will report full-year figures on 7 May.
Panmure Gordon analysts upgraded their earnings forecasts for the next two years by nine to 11 per cent following the update.
“The acquisition strategy is clearly working coupled with positive momentum in the new car market. In addition, Vertu continues to gain market share and has once again exerted strong control on pricing,” they said in a note to investors.
The Society of Motor Manufacturers and Traders has forecast a 1.2 per cent increase in new car registrations this year, following a 10.8 per cent rise in 2013.
Shares rose 1.17 per cent yesterday.