24 July 2012

Vertu Motors, owner of Bristol Street Motors, has reported a strong start to its financial year with like-for-like vehicle revenues growing by 5.1% in the four months to June 30.

The group told shareholders at its AGM that it has traded ahead of the prior year with like-for-like profit growth in each of the key areas of the business.

But chairman, Paul Williams, warned that pre-registration activity was starting to distort the market. He added that the Vertu Motors board believes there is an increasing trend for self-registered vehicles to be classified as private, rather than fleet, registrations within the market.

“The market is witnessing increased levels of self-registration by UK dealers which is inflating registration data compared to sales levels,” he said. “The group (Vertu Motors) continues to follow a policy of not engaging in significant self-registration activity.”

This trend is reflected in the Vertu Motors new car sales figures where retail volumes grew on a like-for-like basis in the past four months by 0.3% against an increase in UK private registrations of 10.1%.

However, like-for-like new retail car profitability rose 4.7% in the period and new retail car like-for-like margins increased to 7.9% (2011: 7.3%).

The group has seen considerable growth in fleet and commercial volumes with a like-for-like increase of 12.2% in the four month period compared to a market decline in registrations of 0.8%.

Used vehicle sales volumes rose on a like-for-like basis 6.7% in the four month period compared to the prior year.

Like-for-like aftersales margins were slightly lower at 42.8% (2011: 43.9%). Mr Williams said this is a result of the group’s strategy to increase service retention for used car customers, particularly in the over four year old vehicle category.

Vertu has continued to add new dealerships. In May it introduced Ford commercial vehicle sales and aftersales to the Bristol Street Commercials site in Swindon and in June it bought two Ford dealerships in Durham and Hartlepool from Holiways.

It has also bought the trade and assets of a Suzuki dealership in Mansfield from the Co-op Group. The dealership is situated in a freehold property adjacent to Vertu’s existing Honda site and is the first Suzuki dealership in the group’s portfolio.

Tags: AGM, financial, Paul Williams, pre-registrations, Vertu Motors