Vertu profits slip despite retail sales growth
10 October 2018
Vertu has seen a 13.4% decline in its profit before tax for the six months ended 31 August on an turnover of £1.56 billion, up 7.9% on the same period in 2017.
After exceptional items, adjusted profit before tax declined from £20.9 million to £18.1m. Total profit before taxation declined from £24.2m in 2017 to £17.3m in the period, predominantly reflecting the impact of a £4.1m profit on disposal of a freehold property.
Vertu reported increased volumes of used cars (up 5.3%), new retail cars (up 4.4%), but a decline in fleet sales (down 11.8%) and Motability sales (down 7.4%) for the six month period.
Chief executive Robert Forrester claimed the market was being impacted by both a continued weakness of Sterling and the WLTP emissions regulations.
Commenting on the results he said: “The board is pleased to see further growth in aftersales revenues and to re-establish growth in used car volumes. On the demand side, consumer confidence has remained robust during the Period reflecting the underlying strength of the UK economy. As is so often the case in the UK new car market, the supply side is by far and away the key to explaining variations and trends.”
Mr Forrester added that September had particularly suffered from WLTP related supply issues and that this was likely to continue into early 2019. However, he added that as a result of new car supply issues used car margins had strengthened.
Analysts have described the results as “robust” given the current overall decline in the new car market.
Vertu held its interim dividend at 0.55p a share, identical to that of last year.