UK's Vertu Motors warns prolonged Iran war could hit prices and demand

Wed, 13th May 2026 10:32

* No direct impact from Middle East conflict yet

* Trading profit ⁠in first two months of new fiscal year robust

* Fiscal 2026 profit drops 16.4%

* Shares fall as much as 4.5% (Adds shares, details on current trading, ‌EV mandate pressure, and context throughout)

May 13 (Reuters) - Vertu Motors warned on Wednesday a prolonged Iran war could ⁠hit vehicle prices and demand as the UK car ⁠dealer posted lower annual profit, hurt by government EV sales targets and disruption from last year's cyberattack at Jaguar Land Rover.

Vertu said it had yet to see a direct impact from the conflict, but its warning adds ‌to signs of strain across the sector as households contend with higher living costs and delay big-ticket purchases, prompting profit downgrades and cost cuts by companies.

However, the group said trading profit in the first two months of its new financial year, which began in March, was ahead of the prior year, helped by strong aftersales and ‌cost reductions.

Vertu said it would pass on higher oil-related costs to customers, with its exposure at current energy and fuel prices at ‌about 1 million pounds ($1.4 million).

The company's shares fell as much as 4.5%.

SALES AND MARGIN PRESSURES

The British government's zero-emission vehicle mandate - which requires carmakers and importers to ensure a rising proportion of their sales are electric - was distorting revenues and forcing heavier discounting, squeezing margins, Vertu ‌said.

That pressure comes as industry demand remains fragile. A sector body this month cut its 2026 UK forecast for zero-emission vehicle sales.

However, Vertu said it was seeing some increase ⁠in interest in ⁠battery-electric and hybrid vehicles as higher fuel costs push ‌motorists to consider alternatives.

Adjusted pretax profit for the year ended February 28 fell 16.4% to 24.5 million pounds.

The company said a cyberattack at Jaguar Land Rover disrupted vehicle supply and reduced ‌availability of certain models, cutting Vertu's gross profit by about 3.9 million pounds. This was largely offset by 3.4 million pounds of insurance proceeds.