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Vertu Motors (LON:VTU)
69p (last night’s close) - mkt cap £245m
Trading Update
Good grief, the car dealership sector is absolutely on fire at the moment. It’s yet another upgrade today -
Further upgrade of expected trading performance for FY22
My summary -
Oct & Nov 2021 trading ahead of plan (and prior year)
Shortage of new cars, but not as bad as expected, and sold at higher margins
Positive customer demand, with strong order book
Used car also supply constrained, values high, but have plateaued - “starting to follow more normalised seasonal trends”
Abnormally high margins in used cars continue
Staff being paid more, to address vacancies, reduced but still above historic levels
Cautious re outlook
Profit guidance raised -
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).
My opinion - this bonanza won’t last, as everyone knows, but it will be filling the coffers with cash, and strengthening the balance sheet.
I continue to see VTU as a prime candidate for a takeover bid, due to its sector-leading balance sheet strength, including lots of freehold property, which could be leveraged by a buyer.
Marshall Motor Holdings (LON:MMH) received a takeover bid recently, so the sector looks in play.
"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)."
This company did the right thing did a buy back before the dividend let’s see what happens to the price in January
@ 69.2p
Coming soon judging by the increasing price
probably as I sold for a 50% profit two weeks ago , GLA
Marshall Motor (MMH) 400p trade offer, a 41% premium. 64.4% holder will accept. [SP=277.83 Cap=217m]
are we next ?????
Unfortunately, for all of Roberts chat and desires to change the world he puts dictatorial management in place that are so old school and non collaborative that vertu doesn’t benefit from its scale.
Innovation is talked about but not acted on.
So in summary they will rise and fall with the rest of the sector (which is fall as the likes of Tesla get a grip)
Two days without any buy backs - very odd so something is going on....
This doesn't make sense. The decision to keep the furlough money was known some while ago. Why would it have such a large effect at a much later point? It's not something that is affecting other motor retailers. I hope someone doesn't know something and is doing some insider trading.
Murky news re furlough clearly casting a long shadow.
Does anyone know why this has fallen almost 6% in one day?
They have to test supply , if non comes forward i think it will rise .
..... breaking out and going to 80p. This market is horrendous at the moment.
Especially around London with the huge expansion of the low emission zone !
Fair points, guys, and well presented. Brian might want to take a leaf out of your books ;-)
He's absolutely right. Many businesses were forced by law to close, and even the exceptional level of tax-payer support through the furlough and business rates relief schemes could not mitigate all the effects of that. Many businesses, including Vertu, suspended dividends, and it is only appropriate that they restart now. I can see the case for the likes of Tesco, Sainsbury, repaying Govt grants, as they were open all the time. But there is no case at all for any dealership to do so. They simply took what was offered, and had no say at all in when they could reopen, and will have no say, either, about any future closures that could be imposed. Management should be congratulated for adapting so well, and growing the business, which will also lead to higher payroll and other tax contributions in the future.
As Robert Forrester has said, when asked if he was going to repay the furlough monies..."No, the Government forced me to shut my business....."
Quite right to.
Does he own this too? Just DMOR, as you suggested ;-)
https://cardealermagazine.co.uk/publish/vertu-motors-attacked-over-dividend-payments-while-keeping-furlough-money/237473
Doesn't alter the facts.
And there's no need to shout, old boy.
And Guess who owns the Daily Mail!!!????
That's right Alex Chesterman, who owns 30% of Cazoo. DO YOUR OWN RESEARCH!
Car dealer Vertu Motors has been slammed for retaining furlough cash despite plans to pay dividends to shareholders.
The firm, whose brands include Bristol Street Motors, last week declared a 0.65p per share payout after profits soared due to pent-up demand fuelling rises in car prices. Vertu claimed £400,000 this financial year and £28million last, which it has retained. One senior industry executive described the dividend decision as 'just not acceptable'.
https://www.dailymail.co.uk/money/markets/article-10099263/Vertu-Motors-slammed-retaining-furlough-cash-dividend-plan.html
Book valuation is 76.3p
https://app.stockopedia.com/share-prices/vertu-motors-LON:VTU
M&A kicking in, in this sector , papers at the weekend could be full of vertu value , re rating to £1 on speculation of a bid or merging ,
DYOR , theses in my view are undervalued at 80p
Any move above 60p and this is off to the races