LONDON (ShareCast) - (Sharecast News) - Automotive retailer Vertu Motors said on Thursday that full-year adjusted pre-tax profits were expected to be in line with current market consensus expectations of £27.2m, as a "robust used cars" market, aftersales and cost discipline all helped to offset the impact of a weaker new retail car market.
Vertu reported stable used car volumes and margins despite supply constraints and subdued consumer confidence, while aftersales gross margins rose to 73.6% from 72.5%, supported by pricing initiatives and improved service conversion.

New car volumes grew 1.4% on a like-for-like basis, though Motability sales sank 21.7%. Fleet volumes rose 13.6%, while commercial vehicle sales declined 4.1%. Core group new car margins improved to 8.0% from 7.8%, aided by a shift in sales mix.

Vertu also highlighted the impact of Downing Street's Zero Emission Vehicle mandate on retail demand, but noted that recently announced EV grants and the increased availability of sub-£20,000 models were expected to boost H2 performance.

The AIM-listed firm's September order book was slightly ahead year-on-year, and operating expenses were flat despite inflationary pressures, with further investment in solar panels aimed at reducing energy costs. Vertu also announced three new BYD outlets, bringing its total to five, and continued its share buyback programme, repurchasing £6.4m of shares to date.

Chief executive Robert Forrester said: "I am pleased with the group's performance in the first half as we have navigated a subdued consumer backdrop and continued uncertainty in the new car market caused by the Government's Zero Emissions Vehicle mandate.

"The board expects results for the full year to be in line with expectations, driven by a continued strong performance from our high margin aftersales business, and greater affordability in the new electric vehicle market with more sub £20,000 new EVs available and a series of Government grants to stimulate EV activity now in place. Encouragingly, the September new retail order book is slightly ahead of last year and likely to benefit from the new grants regime."

As of 0825 BST, Vertu shares were up 0.034% at 59.02p.





Reporting by Iain Gilbert at Sharecast.com

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