9th Oct 2019 08:40
(Alliance News) - Car retailer Vertu Motors PLC on Wednesday raised its interim dividend after a first half revenue improvement and reported further positive trading in the month of September.
In the six months to August 31, revenue rose by 5.6% year-on-year to GBP1.65 billion from GBP1.56 billion, with all its operating segments reporting growth during the half.
Pretax profit however fell by 7.1% to GBP16.1 million from GBP17.3 million, with operating expenses rising 4.5% to GBP153.1 million from GBP146.6 million.
The biggest segment improvement came from the Fleet & Commercial vehicles division which reported revenue growth of 12% to GBP390.5 million from GBP347.9 million.
The Used cars segment had a revenue increase of 6.0% to GBP650.8 million from GBP616.5 million with Aftersales revenue growing by 2.8% to GBP130.7 million from GBP127.2 million.
New car segment revenue increased by 0.7% to GBP472.1 million from GBP468.7 million. On a like-for-like basis, new car revenue fell by 2.2% however, Vertu added that the overall market for UK private new car market registrations fell by 4.2% during the period.
Vertu said: "Continued sterling weakness driving price rises and declining used car residual values have led to an increase in the cost to change for consumers seeking a new car. This has reduced demand with change cycles lengthening."
More recently, Vertu said its profitability in September grew year-on-year.
The retailer explained: "The group's trading performance in September was ahead of prior year levels. September like-for-like new retail volumes were down 1.6% with UK private retail registrations stable. Used vehicle like-for-like volumes rose 3.5% and service revenues grew 11.4% on a like-for-like basis."
Vertu will pay an interim dividend of 0.6 pence per share, up 9.1% from 0.55p in the first half of last year.
New European Union emissions testing regimes came into effect on September 1, but Vertu said the impact of the measures, as anticipated, was not largely disruptive.
Also on the regulatory front, the company said it is engaging with the UK Financial Conduct Authority which is reviewing the motor finance and general insurance sales markets.
Looking ahead, although Vertu anticipates dealership numbers in the UK to decrease, fewer dealerships should improve profitability for those that remain.
The company said that although the UK economy is growing and has record levels of employment, Brexit uncertainty may be met with consumer caution.
Shares in Vertu were up 2.1% at 33.22 pence each early on Wednesday morning in London.
By Eric Cunha; [email protected]
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