Vertu Motors Plc (LON:VTU) are the topic of conversation when Head of Research at Zeus Capital, Mike Allen joins DirectorsTalk to discuss the pre-close trading update. Mike talks us through the highlights, the forecast and assumptions made and shares his thoughts on the company as a long term investment.
Vertu Motors Plc, the automotive retailer with a network of 124 sales and aftersales outlets across the UK, is today provided an update on trading before entering a close period.
Since the trading update provided at the Annual General Meeting held on 26 July 2017, the Group has continued to trade in line with the trends set out in that update and in line with market expectations.
On 31 August 2017 the Group disposed of its freehold Jaguar Land Rover dealership property in Leeds (“the Property”) to a client of Aberdeen Standard Investments, and entered into a sale and leaseback commitment for 15 years on the Property. The consideration for the sale of the Property, settled in cash, was £14m and the book value of the Property was £10m. The profit on the sale will be accounted for as an exceptional profit in the Group’s financial statements.
The Group’s Chief Executive Officer, Robert Forrester, commented as follows: “Our trading continues as expected. The sale and leaseback transaction realises a significant gain on a flagship dealership property and releases additional funds for investment in growth opportunities. We continue to ensure efficient allocation of capital through the share buy-back programme and strategic management of our property portfolio, which was stated at £182m in the Group balance sheet at 28 February 2017, realising value where it is appropriate to do so.”
The Group will announce its results for the six months ended 31 August 2017 on 11 October 2017.