LONDON (ShareCast) - (Sharecast News) - Vertu Motors turned in a drop in pre-tax profits as part of its first-half report card on Wednesday, highlighting a weaker sterling and newly imposed emissions regulations across the EU as factors that had weighed on the firm's margins.
The AIM-listed car retailer told investors that adjusted pre-tax profits had decreased 13.4% in the six months ended 31 August to £18.1m, despite revenues growing 7.1% to £1.5bn.

Vertu claimed that supply side issues in the market had brought about a decline in new car volumes - tightening the outfit's gross margin to 10.7% from 11%.

Despite its thinner interim profits, Vertu chose to keep its interim dividend unchanged at 0.55p per share. Earnings per share slipped to 3.90p from the 4.24p returned to investors a year earlier.

Vertu said registrations in September were at their lowest level since 2011 and that new EU emissions standards were anticipated to cause the group further issues moving forward.

Looking forward, Vertu said that cost pressure would remain "a crucial focus" for the board and noted that a period of significant capital expenditure would shortly be wrapped up, with "materially lower levels" of capex and an improved free cash flow set to follow from March 2019.

Chief executive Robert Forrester, said: "The group's discipline around the allocation of capital, its low net debt level, including a very low usage level of used vehicle stock financing, together with a very strong property portfolio, places the group in a strong position to take advantage of consolidation opportunities to continue to grow the value of the company."

In a separate announcement, Vertu revealed its plans for a £2m share buyback programme. The group said the buyback would commence at "appropriate times" and said the programme was "in the best interests of all shareholders".

As of 1300 BST, Vertu shares had dropped 4.88% to 39p.

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