PAUL SCOTT comments - Stockopedia - VTU9 Dec 2021 08:34
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.