Vertu Motors swings to profit in June; to cut 345 jobs
By Michele Maatouk
Date: Tuesday 14 Jul 2020
(Sharecast News) - Vertu Motors said on Tuesday that it swung to a profit in June amid better-than-expected trading, but announced plans to cut around 345 jobs due to automation and as it looks to cut costs.
The AIM-listed car dealership swung to an adjusted pre-tax profit of £9m in June from a loss of £14.2m in the March to May period. The performance was ahead of June last year and better than the company's expectations of £8.6m.
Vertu's dealerships in England saw all showrooms open for vehicle sales on 1 June, while its 12 sales showrooms in Scotland re-opened on 29 June.
The company attributed the rebound in retail sales demand to a number of factors. It pointed to pent-up demand, with consumers having increased savings ratios during the lockdown.
"Lack of plans to undertake foreign holidays and to stay in the UK may also be increasing demand as well as a potential aversion to the use of public transport," it said, adding that these trends have continued into July.
Chief executive officer Robert Forrester said: "The Covid crisis has driven an acceleration of technology uptake and we are embracing this trend to futureproof the business. As automation progresses, we have made the difficult decision to reduce group headcount by 6%, which contributes to £10m of on-going annualised cost savings being identified."
Vertu said full-year guidance remains withdrawn "given the ongoing uncertainty around the pace and sustainability of economic recovery".
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