Vertu Motors plc (LON:VTU) has provided an update on recent trading activity and a further upgrade to the full year outlook.
Group profitability in October and November 2021 continued to be delivered in excess of its business plan and also prior year levels. Shortfalls in the supply of both new and used vehicles in the UK have continued due to the ongoing dislocation in supply chains impacting global vehicle production. Nevertheless, new vehicle supply to the Group in October and November was better than envisaged and was sold at enhanced margins. Customer demand has remained positive, with strong future order banks in all new vehicle channels being evident. Used vehicle supply constraints continued to underpin vehicle values, which have now plateaued and are starting to follow more normalised seasonal trends. This, together with the application of robust pricing disciplines in the Group, led to above normal margins being retained in used cars.
The Group has made progress in its response to UK wide labour shortages as indicated in the Group’s interim results announcement. Amendments to reward packages have now been rolled out across the Group. A reduction in the number of live colleague vacancies is now evident though they remain above historic levels.
The Vertu Motors Board remains cautious on the future outlook with the potential of further disruption from Covid-19 to our resource levels, consumer confidence and global supply chains. Considering the robust trading performance delivered for the year to date, the Board now anticipates that the Group’s adjusted profit before tax for the year ending 28 February 2022 will be no less than £70m (previously not less than £65.0m).