20th Jul 2016 07:59
LONDON (Alliance News) - Vertu Motors PLC on Wednesday reported growth in profit and revenue in the four months ended June 30, and said it will be able to maintain relations with EU partners although new retail vehicle sales volumes have declined since the EU referendum.
The car dealer said profitability in the four months was ahead year-on-year and in line with the board's expectations, with gross profit up by 24% boosted by a 22% increase in revenue and 8.4% rise in like-for-like sales.
Aftersales revenue rose by 26%, or 6.1% on a like-for-like basis, while used vehicle volume grew by 19% and by 10% on a like-for-like basis, and new retail vehicle sales volume was up 8.9%.
Group and like-for-like gross margins also improved due to higher used car and service margins, Vertu Motors said.
On a more negative note, the company said new retail vehicle sales volume is behind this time last year since the UK's vote to leave the EU, but said revenue streams of used cars and aftersales have not seen any negative impact to date.
"The UK represents the second biggest market for new vehicles in the current EU and thousands of continental European jobs are reliant on a continuation of this trade with the UK. Consequently, the board believes that manufacturer partners are likely to be keen to support UK retailers through any period of uncertainty," Vertu Motors said in a statement.
"The majority of the group's new vehicle sales are imported to the UK from the EU. Our manufacturer partners clearly have a vital interest in ensuring continued free trade access to the key UK market and the board will be monitoring the negotiations of the trade relations between the EU and UK," the company added.
Vertu Motors added that despite the fall in sterling, it still remains at levels which are attractive for European manufacturers to export vehicles to the UK, which should help to underpin the UK new car market at current record levels.
"Given the performance of the group to date and the ongoing integration and improvement of businesses acquired in recent periods, the board expects the performance for the full year to be in line with current market expectations," the group said.
Vertu Motors is holding its annual general meeting on Wednesday.
Shares in Vertu Motors were trading up 0.5% at 46.50 pence on Wednesday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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