LONDON (ShareCast) - (Sharecast News) - Car dealership operator Vertu Motors reported revenue growth of 3.9% in its first half on Wednesday, to £2bn, with the group now expected to be the fourth-largest automotive retailer in the UK by revenue.
The AIM-traded firm recorded market share growth in all new vehicle channels in the six months ended 31 August, with a 6% new van market share achieved.

Adjusted profit before tax came in at £28.2m, down from £51.8m year-on-year, as Vertu's gross margin narrowed slightly to 11.2% from 11.6%.

Free cash flow totalled £23.2m in the first half, down from £63.6m year-on-year, and net cash totalled £17.8m at period end, up from £16.2m at the end of February.

Net tangible assets per share came in at 71.2p, up from 66.8p at the start of the period, which the board put down to a "strong" asset base and cash flow generation.

During the period, the company repurchased 10.5 million shares, or 2.9% of share capital in issue, at a cost of £5.9m since 1 March.

The directors declared an interim dividend of 0.7p per share, up from 0.65p for the first half of the 2022 financial year, payable in January.

Looking ahead, the Vertu board said it now expected full-year profits would be ahead of market expectations.

It said it delivered a "strong performance" in the "key month" of September, despite ongoing supply constraints, as new and used vehicle supply constraints were being offset by continued higher margins.

Aftersales demand remained "robust", and increased technician resources were now in place to drive revenues.

Cost pressures were evident in the business, the directors said, in particular energy costs, with an energy strategy developed and being executed including approved capital investment.

Government action regarding energy costs and national insurance rates would benefit the group in the second half, the company said, adding that a "strong" acquisition pipeline was in place.

"The first half has seen a strong trading performance with vehicle margin strength offsetting market driven volume shortfalls," said chief executive officer Robert Forrester.

"The group continues to benefit from its focus on operational excellence around cost, conversion and customer experience aided by continued digitisation initiatives."

Forrester said cash flow generation was "strong", leading to the increased dividend for the first half.

"The business is strategically very well placed with significant firepower to expand its footprint of franchised dealerships across the UK."

At 0843 BST, shares in Vertu Motors were up 8.55% at 46.95p.

Reporting by Josh White at Sharecast.com.

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