Vertu Motors' 2020 profits ‘ahead of forecasts’ after positive COVID-19 lockdown trading

Vertu Motors has reported that it expects its pre-tax profits for the financial year ending February 28, 2021, to exceed analysts’ current £18 million forecasts.

In a Trading Update issued this morning the AM100 PLC said that “strong marketing activity, maximisation of omni-channel retailing and cost control had meant that trading performance in the two-month period to 31 January 2021 continued its earlier reported positive trend".

Vertu had previously announced, in early December, that that it had traded approximately 15% above last year at an adjusted PBT level, despite the impact of COVID-19 ‘Lockdown 2’ in England, in the nine months ended November 30.

Today’s statement said: “Despite the impact of regional lockdowns throughout December and the national lockdown from 4 January, strong marketing activity, maximisation of the Group’s omni-channel retailing functionality and cost control have meant that trading performance in the two-month period to 31 January 2021 continued this positive trend.

“Overall profit performance also benefited from the previously announced cost reduction programme and the continued business rates holiday on showrooms.”

Vertu did concede that “uncertainties remain” about trading conditions under the current ‘Lockdown 3’ regulation as February trading continued to be impacted.

However, this week saw the group launch a drive to maximise its potential sales through ‘click and deliver’ services.

Taking to Twitter on Monday (February 1), chief executive Robert Forrester said: “Today we agreed to launch free delivery on new and used cars within 30 miles of each of our dealerships.

“Together with a 14-day money back guarantee on used cars, our customer proposition continues to improve.”

The group’s cost control and strong balance sheet also allowed it to expand in 2020.

In October it completed the acquisition of Sandicliffe Motor Group’s Kia dealership in Nottingham and December saw it establish a new BMW Group franchise division with the completion of the long-awaited acquisition of 12 BMW, Mini and BMW Motorrad franchised motor retail outlets from Inchcape’s Cooper BMW division.

The group is also making a push to drive efficiencies by bringing more of its franchised outlets into shared showrooms.

Last week AM reported that its Bristol Street Motors division had seen a Citroën franchise added into its Macclesfield Ford dealership operation as part of a £200,000 redevelopment of the facility.

That project mirrored a project undertaken as part of a £250,000 upgrade of its site in Worcester last August.

Forrester said: “I believe multi franchising dealerships has to be pivotal to sustaining profitability of many locations.

“I am delighted with the progress we are making in this area and which will be implemented by the end of 2021.”