10th Oct 2018 10:25
LONDON (Alliance News) - Vertu Motors PLC on Wednesday reported solid like-for-like interim revenue growth, but profit fell due to increased operating costs and absence of exceptional disposal gains.
The automotive retailer posted revenue of GBP1.56 billion for the six months to August 31, 7.9% higher year-on-year. Like-for-like, revenue grew 8.0%.
However, Vertu's pretax profit fell to GBP17.3 million from GBP24.2 million, partly due to the non-repeat of a GBP4.1 million disposal profit. On an adjusted basis, pretax profit fell to GBP18.1 million from GBP20.9 million.
Operating expenses rose to GBP148.1 million from GBP138.6 million, including a GBP2.4 million rise in employment costs.
The company's interim payout to shareholders has been kept at 0.55 pence per share.
Used car volumes rose 5.3% year-on-year, and 5.8% like-for-like - Vertu believes the market fell slightly during the period but prices strengthened.
In new vehicles, volumes were up 4.4% and 5.7% like-for-like, but Vertu said September registrations hit the lowest level since 2011, affected by new emissions regulations and a lower sterling hurting manufacturers.
Vertu said the new car market fell as well during the period, but the fall in volumes was slightly skewed towards premium franchises, to which it has less exposure.
Going forward, Vertu said supply side issues in new cars have continued, while the UK's political uncertainty may affect consumer confidence.
Cost pressure continues to negatively impact performance, Vertu continued, but it added a "significant" period of expenditure will be coming to an end during its second half. It expects to meet full year expectations, with analyst consensus seeing adjusted pretax profit of GBP22.1 million, compared to GBP28.6 million in its prior year.
Shares were 4.5% lower on Wednesday morning, last quoted at 39.15p each.
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