16th Oct 2024 10:29
(Alliance News) - Vertu Motors PLC on Wednesday reported a steep fall in interim profit, driven by rising operating expenses and finance charges.
The Gateshead, England-based automotive retailer said pretax profit fell by 27% to GBP22.1 million for the six months ended August 31, from GBP30.1 million a year before.
This was attributed to a rise in operating expenses and finance charges, particularly wages and salaries, demonstrator and courtesy car costs and manufacturer stocking charges.
More positively, Vertu reported a 2.9% rise in revenue to GBP2.49 billion for the half, up from GBP2.42 billion a year before.
Vertu said this was due to an increase in the like-for-like number of vehicles sold and growth in aftersales revenues during the period.
The company also noted the impact of the sale of surplus properties during the six months.
Vertu declared an interim dividend of 90 pence per share, up 5.9% from 85p last year. The dividend will be paid on January 17, 2025.
Vertu also noted it has agreed a new GBP3 million share buyback programme. The programme will be completed by February 28, 2025.
Vertu shares were up 3.8% at 59.80p each in London on Wednesday morning.
Looking ahead, Vertu said it remains confident that it will deliver full-year results in line with current market expectations.
The company noted that September's performance delivered profit in line with prior year levels.
However, it added that it is "cautious" on the outlook for new vehicle profitability due to the government's zero emission vehicle mandate.
Chief Executive Robert Forrester said: "I am pleased with the group's first half performance against a fast-shifting market backdrop. Our high margin aftersales business delivered an excellent [first half] performance, aided by higher technician numbers and execution of the group's vehicle health check process."
By Lydia Doye, Alliance News reporter
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