24th Jul 2014 12:57
LONDON (Alliance News) - Vertu Motors PLC Thursday said it expects its trading performance for its current financial year to be ahead of current market expectations as it reported a 16% increase in like-for-like revenue over the four months to the end of June.
In addition, Vertu said that total gross profit increased by 28%, reflecting the impact of higher volumes of vehicles sold and acquisitions, with like-for-like gross profit increasing by 9.9%.
However, gross margins fell both as a result of the change in sales mix, shifting to a higher proportion of lower-margin vehicle sales, and due to the lower margins achieved on new vehicles. Operating expenses as a percentage of sales continued to decline.
Separately, Vertu said Chairman Paul Williams will retire after seven years in the role. The automotive retailer said it has already found a replacement, with Peter Jones, whose background includes his joint ownership of independent motor group Bramall and Jones Ltd, amongst other roles in the industry, to join on January 1, 2015.
With his departure now looming, Williams addressed shareholders at Vertu's annual general meeting for the last time.
"During the period, the group has continued to trade ahead of management's expectations, reflecting the accelerated turnaround of prior year acquisitions, improving aftersales margins and profits, and the continued momentum in the UK new vehicle market," Williams said.
"The outlook for the new car market remains favourable with continued growth anticipated in the private market, albeit with new car margins under pressure. The used car market has returned to growth, and in aftersales the growth in the UK vehicle parc coupled with the continued improvements in the group's customer service and retention, provide a robust backdrop for this crucial high margin area of the group's business."
Vehicle parc refers to the number of cars and other vehicles in a region or market. It is typically used to gauge the capacity within a market or region for aftersales.
Vertu Motors shares were down 0.5% at 55.70 pence Thursday afternoon.
By Samuel Agini; [email protected]; @samuelagini
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