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Scrappage scheme gives Vertu a boost

&shy;&shy;VERTU, the motor dealer, saw its profits for the six months to the end of August surge 47.4 per cent, as the government&rsquo;s scrappage scheme boosted sales.<br /><br />The Newcastle-based group, which trades as Bristol Street Motors, reported pre-tax profits of &pound;2.8m, up from &pound;1.9m last year, and said it had sold 1,686 cars under the scrappage scheme.<br /><br />Revenue fell to &pound;401.3m from &pound;423.5m reflecting lower used car transaction prices and the subdued new car market.<br /><br />Broker Brewin Dolphin upped its target price for Vertu to 65p from 55p, and repeated its &ldquo;buy&rdquo; rating on the stock, while Panmure Gordon moved its target price up from 50p to 60p.<br /><br />Vertu, which has 50 franchised, four non-franchised and two stand-alone bases around the country, raised &pound;30m in a cash call earlier this year, which it used to fund a &pound;7.9m takeover of many of Brooklyn Motors&rsquo; sites, which went into administration in June.<br /><br />Vertu said it will now use its cash pile to expand. <br /><br />&ldquo;It&rsquo;s a once in a lifetime opportunity to get our asset base up at a low value,&rdquo; chief executive Robert Forrester said yesterday.<br /><br />&ldquo;Our profitability has risen significantly as we continue to expand and drive higher margins from our existing business,&rdquo; he added.<br /><br />Looking ahead, Vertu hopes an upturn in the market will counter any losses made by the end of the government&rsquo;s scrappage scheme, which is currently scheduled for January.<br />