# Vertu Motors sales volumes at higher levels than previously anticipated

- Link: https://www.directorstalkinterviews.com/vertu-motors-sales-volumes-at-higher-levels-than-previously-anticipated/4121012994
- Published: 2021-07-29T07:24:48+01:00
- Author: Giles

**Vertu Motors plc** (LON:VTU) has today stated that as a consequence of the continuing
strong trading performance, the Group is providing an update on current trading 
and an upgrade to the full year outlook. 

Exceptional UK used car market conditions have resulted in the Group experiencing
strong gross margin retention, which has had a material positive impact on profitability
and cash flow.  Whilst used vehicle supply remains tight, particularly in the premium
segment, the Group has been successful in maintaining inventory and sales volumes
at higher levels than previously anticipated.  New vehicle supply constraints, due
to semi-conductor shortages, have had no material impact on the Group’s trading 
performance to the end of June 2021.  New vehicle volumes and margins have remained
strong.  Service revenues and profits have, as expected, strengthened in recent 
weeks as the impact of the timing of annual service and MOT work mirrors the prior
year’s lockdown and release.

The Vertu Motors Board now anticipates that the Group’s adjusted profit before tax
for the six-month period ending 31 August 2021 will be no less than £40m.  

Uncertainty remains around the remainder of the financial year.  New vehicle supply
levels will be constrained in the coming months potentially impacting profitability.
As a consequence of reduced new vehicle supply, used vehicle supply may also be 
restricted.

Uncertainty also remains around the possible impact of COVID-19 from potential future
restrictions and colleague absence.  The current UK wide labour shortages, high 
vacancy levels and upward pressure on employment costs remain a risk for the business.

At this stage, despite the exceptional performance during the first half of the 
year, the Board retains a cautious outlook but nevertheless now anticipates that
the Group’s adjusted profit before tax for the current financial year ending 28 
February 2022 will be in the range of £40m – £45m (previously £28m – £32m).  The
Board remains very confident in the prospects for the Group, which is strategically
well placed to capitalise on the changes and opportunities in the UK motor retail
sector. 

Share on: