7th Feb 2025 14:27
(Alliance News) - Vertu Motors PLC on Thursday announced a new share buyback programme as it cautioned that full-year results will be below current market expectations, citing the UK budget and a zero-emission vehicle mandate.
The Gateshead, England-based automotive retailer said UK volumes overall in the new retail channel for new cars were the lowest for 25 years, including the pandemic period.
Further, for used cars, gross margin expansion was lower than anticipated due to subdued consumer confidence and heavy discounting of new cars.
The company noted that its cost base will rise by around GBP10 million as a direct result of the UK government budget, under which many employers will pay higher national insurance contribution costs from April. Vertu added that it delivered action to fully offset the cost which will incur an exceptional restructuring cost of up to GBP4.0 million in the current financial year ending February 28.
Vertu Motors expects to report a lower annual adjusted pretax profit than the current Stifel estimate of GBP34.5 million. For financial 2024, the company had reported an adjusted pretax profit of GBP37.8 million, which was down 3.8% from GBP39.3 million in financial 2023.
Chief Executive Officer Robert Forrester said: "The group's high margin aftersales business is performing strongly. However, the government's zero emission vehicle mandate is causing severe disruption to the UK new car market, and the consumer environment is subdued. Despite these headwinds, the Vertu team is delivering, as seen by our significant market share gains in battery electric vehicle new cars in the final quarter of the year. We now have award winning BEV dealerships with Citroen, MINI and VW."
The company announced a new share buyback programme for up to GBP12 million, reflecting Vertu Motors's intention to increase capital allocation to buybacks. It will run until maximum February 28, 2026.
Vertu Motors shares fell 0.6% to 52.40 pence each on Friday afternoon in London.
By Tom Budszus, Alliance News slot editor
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