Vertu Motors to restart dividends to shareholders on the back of ‘exceptional’ used car market

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Motor retailer Vertu has signalled it will soon restart dividends payments to shareholders after seeing “exceptional” used car market conditions.

The Team Valley headquartered company, which last week announced the creation of 50 new North East jobs, has issued an update ahead of publishing interim results, saying it has upgraded its full year outlook yet again.

Vertu Motors, which trades from more than 150 outlets under the Bristol Street Motors, Vertu and Macklin Motors brand names, said it expects to report an adjusted profit before tax of between £50m and £55m in the six months to August 31 – an increase of £10m on expectations it forecasted in July.

It said that like-for-like new vehicle order take at Vertu for the key month of September is currently running in excess of prior year levels, although there is a risk of new vehicle supply shortages, which will result in vehicle deliveries being delayed into future periods.

In a trading update the firm said: “The group continues to experience strong used vehicle gross margin retention, driven by the exceptional UK used car market conditions. Consequently, the group expects that it will deliver an adjusted profit before tax of no less than £50m in the six months to 31 August 2021.

“As a consequence of reduced new vehicle supply, used vehicle supply may also be restricted in the coming months.

“Uncertainty also remains around the possible impact of Covid-19 from potential future restrictions and colleague absence.

“The current UK wide labour shortages, high vacancy levels and upward pressure on employment costs remain a risk for the business.

“As a result of the strong performance seen in the financial year to date, the board intends to re-establish the payment of dividends to shareholders upon finalisation of the interim results.

“The board remains very confident in the prospects for the group, which is strategically well placed to capitalise on the changes and opportunities in the UK motor retail sector.”

Shares in Vertu Motors were tracking at 50.7p, a rise of 7.4%, following the profit upgrade.

Last week Vertu’s chief executive Robert Forrester featured on the ITV reality show Undercover Big Boss, donning a disguise to go undercover within his business.

He posed as a university lecturer from Aberystwyth who was checking out potential careers for the post-Covid world, and said he was pleased to see the workings of his company up close.

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