Vertu Motors Reports In-line Trading Update
Why we think this is good
The trading update from Vertu Motors contains a mix of positive and negative factors. On the positive side, the company reported growth in new car retail volumes, high margin service revenues, and improved profitability. However, there were also declines in Motability and used vehicle sales volumes, reflecting challenging market conditions. Overall, the update indicates the retailer is navigating a difficult environment reasonably well, with the full year result expected to be in line with market expectations.
Key Points
- New car retail like-for-like volume growth of 7.0%, gaining market share
- Motability sales volumes declined 23.2%
- Fleet and commercial vehicle sales grew 3.0% with stable gross margins
- Used vehicle volumes fell 3.8% due to tight supply and subdued demand
- High margin service revenues increased 4.1%
- Improved gross profit in service and parts channels
- Adjusted profit before tax remained ahead of prior year
- Full year results expected to be in line with market expectations
- £12m share buyback programme continues with £4.5m utilised to date
Summary
Vertu Motors, a leading UK automotive retailer, has provided a trading update for the three-month period to 31 May 2025. The Group reported new car retail like-for-like volume growth of 7.0%, gaining market share against the UK retail market. However, Motability sales volumes declined 23.2%, reflecting shifts in market share. Fleet and commercial vehicle sales grew 3.0%, with stable gross margins. Used vehicle volumes fell 3.8% due to tight supply and subdued demand. High margin service revenues increased 4.1%, and improved gross profit was delivered in the service and parts channels. Consequently, adjusted profit before tax remained ahead of the prior year. The Board expects the full year results to be in line with current market expectations.