Vertu Motors plc (LON:VTU) has provided an update on current trading and a further upgrade to the full year outlook, ahead of the announcement of its results for the six-month period ending 31 August 2021.
The Group continues to experience strong used vehicle gross margin retention, driven by the exceptional UK used car market conditions. Consequently, the Group expects that it will deliver an adjusted profit before tax of no less than £50m in the six months to 31 August 2021.
The Group’s like-for-like new vehicle order take for the key month of September is currently running in excess of prior year levels, however, there is a risk that well documented new vehicle supply shortages will result in vehicle deliveries being delayed into future periods. As a consequence of reduced new vehicle supply, used vehicle supply may also be restricted in the coming months.
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.
The Board remains cautiously optimistic and is upgrading the estimate for profit before tax for the current financial year to be in the range of £50m to £55m (previously £40m to £45m). As a result of the strong performance seen in the financial year to date, the Board intends to re-establish the payment of dividends to shareholders upon finalisation of the interim results. 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.
