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