Vertu, Lookers upgrade profits outlook

  29 July 2021

An ‘exceptional’ used car market has driven two of the largest UK retailer groups, Vertu and Lookers, to issue profit upgrades today, while international group Inchcape has issued strong H1 results.

Vertu has said its adjusted profit before tax for its current financial year ending 28 February 2022 will be in the range of £40m-£45m. Previous expectations were between £28-£32m.

According to the group: “Exceptional UK used car market conditions have resulted in the group experiencing strong gross margin retention, which has had a material positive impact on profitability and cash flow. Whilst used vehicle supply remains tight, particularly in the premium segment, the group has been successful in maintaining inventory and sales volumes at higher levels than previously anticipated. New vehicle supply constraints, due to semi-conductor shortages, have had no material impact on the Group’s trading performance to the end of June 2021.”

However, Vertu cautioned on new car supply for the second half of 2021 which could impact used cars.

Lookers issued a statement similar in tone, and said: “The group has delivered an excellent trading performance throughout the period, despite continued disruption and uncertainty caused by Covid-19. This positive momentum has been driven by continued outperformance of the UK new retail car market combined with strong used volumes and margins, underpinned by Lookers’ improved hybrid, omni-channel customer experience. The results also reflect a resilient aftersales performance and the benefits of material cost reductions.

“Underlying profit before tax in H1 is now expected to be approximately £50m compared to a £36.1m underlying loss last year.”

Meanwhile, International automotive distribution and retail firm Inchcape has cautioned over the future impact of new car supply shortages while reporting profits up to £143m before exceptionals in the first half of 2021 up from £9m last year on a turnover of £3.9 billion. After exceptional items Inchcape’s profits for H1 2021 were £61m.

Inchape upgraded its forecast for the full year last month saying the 2021 profit before tax (pre-exceptionals) was significantly ahead of the published market consensus (£216m).

In the UK and Europe, which includes Russia, Inchcape Retail saw operating profit for the first half of the year reach £38.6m up from a loss of £18m in the same period last year. However, this figure includes £10m of profit from Russia with the firm adding: “The performance in Russia was also strong, and the now disposed operations in St.Petersburg contributed c£110m of revenue and c£10m of profit to the first half result.”


Call Tracks


Start your free 14 day trial

Get free access to our Bulletin, Agenda & Profit for 14 days.

After 14 days we will auto bill your credit or debit card unless the order is cancelled.

    As an auto retail executive you need insightful and unique industry intelligence to boost your business potential. Here’s a taste of what Auto Retail Network has to offer:

    • Get informed and boost your business potential
    • More than 1,200 fellow executives have joined us
      since launch
    • Independent, carefully crafted, unique content relevant to you and your business
    • Develop a greater awareness of market trends and opportunities
    • Access to a wide range of materials whenever, wherever and however you want it
    • Significant discounts on ARN events, reports and
      other publications