LONDON (ShareCast) - (Sharecast News) - Vertu Motors reported resilient full-year results on Wednesday despite a weaker UK new car market, with profits coming in line with expectations and a strong start to the new financial year supporting a confident outlook.
For the year ended 28 February, group revenue rose to £4.76bn from £4.69bn, while adjusted pre-tax profit fell to £29.3m from £34.7m, impacted by softer retail demand and challenges linked to the UK government's zero emission vehicle mandate.

Statutory pre-tax profit declined to £24.8m, and adjusted earnings per share dropped to 6.58p.

The AIM-traded group maintained strong cash generation with £37.3m of free cash flow and reported net debt of £66.6m, lower than expected.

A final dividend of 1.15p took the total for the year to 2.05p.

Vertu said aftersales delivered solid growth, with like-for-like revenue up 5.8% and gross profit rising in the core business.

Used car margins increased slightly, though margin expansion was constrained by weaker consumer confidence.

Active portfolio management included the divestment of non-core assets at a premium and an expansion into Chinese OEM outlets.

Trading in March and April was ahead of the prior year, with stronger profitability driven by improved retail activity and robust operational execution.

The company reiterated its cautious stance amid economic uncertainty, but said its low gearing and strong balance sheet position it well to capitalise on future opportunities.

Vertu had also launched a £12m share buyback programme, with £2.2m of shares repurchased to date.

"With challenging market conditions during the year which saw the lowest new retail car market for 25 years, we have focused on the things we can control and delivered increased new retail electric vehicle sales ahead of the market and strong performances in used cars and aftersales," said chief executive officer Robert Forrester.

"In addition, cash generation was robust in the second half with net debt levels reduced compared to market expectations."

Forrester said that in anticipation of government-related cost pressures effective 1 April, the business undertook a significant cost reduction programme to fully offset the impacts and position the group for the future.

"Trading in March and April has been stronger than the prior year, as the UK retail new car market improved from its lows and the group continued to focus on operational excellence.

"Our high margin aftersales business has sustained its robust performance."

At 0930 BST, shares in Vertu Motors were up 0.04% at 63.13p.

Reporting by Josh White for Sharecast.com.

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