Vertu Motors (AIM:VTU) has shown investors rising revenue and profitability, and it says it expects to outperform current expectations.
In its interim results statement, the UK auto retailer, which operates 196 sales and aftersales outlets, reported revenue of £2.60bn for the six months to 31 August, up from £2.51bn a year earlier, as adjusted pre-tax profit rose 19% to £23.8m from £20m.
Profit before tax rose 24.1% to £24.2m, including £0.4m of net non-underlying income.
Chief executive Robert Forrester said the group had "delivered a strong first-half performance, with record revenues and adjusted profit before tax increasing by 19.0% to £23.8m," adding that gross profit grew across every channel while costs stayed under control.
Vertu added that full-year results for the year ending 28 February 2027 are expected to come in ahead of current market expectations, having already lifted guidance twice earlier in the year. Those current market (analyst) expectations (compiled by the company) see adjusted pre-tax profit at £26.5m, with estimates ranging from £25.5m to £27.1m.
In today's interim figures, like-for-like revenue grew 4.3% in the period, with like-for-like gross profit up £10.9m across all channels; aftersales gross profit rose to £129.2m from £127m, supported by customer service plan retention.
Battery electric vehicle new retail sales volumes grew 125.6%, well ahead of market growth of 75.9%, while Chinese-brand outlets expanded to 20, with 11 more planned over the next nine months.
Free cash flow reached £17.5m, up from £0.4m a year earlier, representing 94% cash conversion, while net debt fell to £54.2m from £78.3m a year earlier and £61.3m at the last full-year close. Tangible net assets per share rose to a record 80.8p from 75.9p at 28 February.
In the half, the company agreed new three-year banking facilities, including a £70m revolving credit facility with a £50m accordion, which it said would lower future finance costs; the facilities were renewed in early October at a lower cost.
Vertu bought back 2.4m shares for £1.7m in the period, taking total repurchases since 2018 to 21.9% of share capital, with £10.2m remaining under the £12m buyback announced on 5 March; the board has agreed to continue purchases up to 85p per share.
The board declared an interim dividend of 1.00p per share, up 11% from 0.90p a year earlier, payable in January 2027.
Stronger than expected September
Trading in September, the key plate-change month, was "stronger than anticipated," with gross profit ahead of the prior year across all principal revenue streams once adjusted for the disruption caused by last year's Jaguar Land Rover cyber incident.
The company said the Zero Emission Vehicle mandate continues to pressure new-vehicle pricing, channel mix and supply, a strain it expects to persist into 2030 even if the government's ongoing consultation, open until 23 October, results in revised targets.
Meanwhile, reporting baubels, in October, the group received Autotrader's "Retailer of the Year" award for the second consecutive year, alongside "Bikes Retailer of the Year."