Car dealership chain Vertu Motors expects higher profits for the year than previously forecast as the secondhand car market continues to grow, the company said in a statement this morning.
The announcement is the second profit upgrade made by the company in the space of a single month.
Vertu’s profits for the year are now set to fall between £50m and £55m, a jump from older estimates of between £40m and £45m.
The group said the announcement was driven by “exceptional” UK used car market conditions with like-for-like new vehicle orders for September, a key month according to Vertu, currently higher than previous years.
In light of the upgrade, the car company said it will reintroduce a dividend for its shareholders and launch a £3m share buyback scheme.
But the firm added that in spite of its performance, uncertainty because of the pandemic was still a concern.
“The current UK-wide labour shortages, high vacancy levels and upward pressure on employment costs remain a risk for the business,” the used car company said.
Supply issues in the new car market, exacerbated by the shortage of computer chips used in motor vehicles, has partly driven the boom in the used car market – another cause for concern for Vertu.
“There is a risk,” the company warned, “that well-documented new vehicle supply shortages will result in vehicle deliveries being delayed into future periods.”