Small cap round-up
By Alexander Bueso
Date: Wednesday 08 May 2019
(Sharecast News) - Vertu Motors said on Wednesday that its chairman was stepping down as it reported a drop in full-year pre-tax profit.
In its final results for the year to 28 February 2019, the automotive retailer said adjusted pre-tax profit was ahead of market expectations at £23.7m, but down from the previous year's £28.6m.
Total group revenue during the year was up 6.7% to £2.98bn, while like-for-like revenue was 5.1% higher.
Like-for-like revenue from the used car segment was up 11.6%, while aftersales LFL revenue grew 8.8% and new car revenue edged up 2.9%. On the downside, revenue from fleet and commercial declined 3.9% on a LFL basis.
The full-year dividend was lifted 6.7% to 1.6p a share.
The company said it had achieved a "credible" result in profit terms as the automotive retail sector faced a number of challenges, including disruption to new vehicle supply due to a weaker pound and EU Worldwide Harmonised Light Vehicle Test Procedure regulations. It also pointed to the impact of political uncertainty on consumer confidence and "significant" cost pressures.
Chairman Peter Jones announced that he would be stepping down from his role in the coming months, "having overseen a number of board changes in the last 18 months and with the group in an excellent position and poised for further growth".
Chief executive officer Robert Forrester said: "Our highly skilled, disciplined and motivated team offers our aftersales, used and new vehicle customers outstanding service. By executing the basic fundamentals well, and with our strong financial position, Vertu will continue to generate significant and growing levels of cash.
"Over the last three years, we have invested over £85.0m in our capex programme across our dealership estate. This programme is now coming to an end and we would expect to generate increased levels of cash which, through our disciplined capital allocation framework, we will invest in operations, acquisitions and dividends as well as share buybacks, where appropriate."
Construction services business Morgan Sindall said on Wednesday that it has enjoyed a "strong start" to the year as its order book grew.
In an update on trading from 1 January to date, the company said all divisions have made further positive operational and strategic progress, with the committed order book as at 31 March up 8% from the year end position to £3.8bn.
Meanwhile, the regeneration and development pipeline grew 2% to £3.2bn.
The company said its construction and infrastructure division has continued its focus on contract selectivity and operational delivery and is expected to deliver the anticipated margin improvement in the year.
The Fit Out business has performed as expected against the predicted backdrop of a general tightening in overall market conditions, it said, while the property services segment is delivering its expected margin growth and is the most significant contributor to the growth of the group order book.
The Partnership Housing division has performed as planned and is beginning to deliver the expected improvement in its operational delivery. The estimated average capital employed for the full year remains at around £150m, with an increase in investment expected across the rest of the year as its developments progress.
Morgan Sindall said the timing of developments and scheme completions in Urban Regeneration have progressed as scheduled, with average capital employed for the year expected to be approximately £95m, as previously guided.
Based on its performance to date and current visibility of future workload, the group said it's on track to deliver a full year performance in line with its expectations and with more of a weighting towards the first half than in previous years.
Chief executive John Morgan said: "We have had a strong start to the year and the positive momentum coming into 2019 has continued. Our order book is showing good growth and our balance sheet and cash position are in very good shape. We are therefore excited by the opportunities ahead in each of our markets."
Morgan Sindall also said in the statement that its average daily net cash since the start of the year to 30 April was £138m, up £12m from the same period last year. As a result, the average daily net cash for the year is expected to be in excess of £85m.
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