Motor retailer Vertu says it has had a strong start to the year despite uncertainty surrounding consumer demand and vehicle supply.
Ahead of its AGM the Gateshead business, which runs 160 dealerships under the Bristol Street Motors, Vertu Motors and Macklin Motors banners, says that constrained supplies of new and used vehicles in the UK have continued, which has served up strong margins in its new retail and fleet channels, and used car sales.
In a stock market announcement, the firm said: “The group has also seen supply constraints continue in used cars. This has had two effects. Firstly, combined with the comparative period reflecting post lockdown pent-up demand, it has resulted in the group seeing an expected significant decline in like-for-like used car volumes in May compared to the previous year.
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"Secondly, the group has been able to maintain strong retention of gross profit on used cars, with per unit profit in May at above prior year levels, as used car prices stabilised.”
As supply issues continue, the group said its high-margin aftersales departments benefited from additional working days in May 2022, which drove revenues above prior levels. It is also making progress in its parts departments and accident repair centres.
Looking ahead, however, Vertu directors say it is too soon to predict changes in full year trading profits but that it is continuing to consider acquisitions.
The firm said: “The market outlook remains unclear due to uncertainty of consumer demand and vehicle supply although new vehicle supply is anticipated to improve gradually in the months ahead. “The group has had a strong start to the financial year but it is premature at this stage to indicate any changes to market expectations of the full year trading profits.
“Management remains focused on the delivery of operational excellence around cost, conversion and customer experience. In addition, the Group continues to evaluate and execute acquisition opportunities as it seeks to deliver its core strategic objective of growth.”
