Member Info for Stalin123

That post by mildmouth ( hope he doesn't mind me sharing ) speaks volumes about the difference in these two businesses.

As mentioned in posts earlier this year, Motor retail companies have been buying up dealerships, paying way over the odds and reporting increased profits on the back of it. The way they have been achieving that is by carrying the overpayment in the balance sheet as "goodwill" and these days (wrongly in my opinion) accounting rules allow them to apply largely subjective tests not to write down the goodwill. However, when as in the case of Pendragon they start having to look at abandoning certain manufacturers' franchises then the potential for having to write off huge sums of this "goodwill" is enormous. Vertu is a much more defensive business having net tangible assets per share of 38p after deducting �95 million goodwill, whereas Pendragon has about �350 million of goodwill which represents almost the entire net worth in the balance sheet, so net tangible assets per share of about "zilch"! Nevertheless, I suspect it is almost certain that Vertu will be compelled, like Pendragon, to write off some considerable sums of that goodwill. We have all been there before and, in one major market dip, could buy motor dealer shares for under net tangible asset value and in some cases well under.

I remember it being a penny and 24hrs away from going bust. I was an RD at the time and didnt have a new car to sell. We filled the showrooms full of pre-reg and used cars. We had no demos and were on cash terms only with the manufacturers. They ended up financing via lots of lenders and giving them 7% of the company to stay afloat. Bad memories indeed.

I fear the dragon have done what they did in 2006/07 pre- reg lots of cars taken the VB to profit and not stood them at the right money and are now paying the price. There are many areas of the business they ignore to correct, to hit their forecasts. On electric cars they reckon only 21.7% will be fully electric by 2030. So some way off yet. Hope to be out of this by then :-)) gla

Wonder who they are going to appoint in this role ref rns. More importantly how long will they last. Think again who ever u are. Grass greener and all that :-))

Just on new car stock. Dealer don't tend to pay for new cars unless they pre-reg them. Showroom stock is called operating stock and depending on manufacturer can stock for upto a year before becoming fully paid, however is interest bearing after 3 months. Well that's the way it worked pre 2010 but things could have changed. May get a dead cat tomorrow i hope

Put out a profit warning that would re-rate the sector. But yes if your invested in the motor trade vtu a safer bet. Its trying not to panic looking at paper losses and think about where its going to be in march next year. Gla dyor

Jolly knowing the dragon they will written everything back as far as possible to give themselves a head start for next year. Thus releasing it into 2018. If you're going to put out a profit warning might as well put out a bad one. Back in 2008 they reported a loss of 200m but could have made it less. Hope this make sense.

Aldaniti looks like i picked the wrong week to give up smoking, and alcohol. Yes could be a lean winter. Looking at lookers share price the market expects the same from them.

Pageyboy its not skill but on Friday after watching vtu fall i sold these at a small hit to buy in at 42.75p just luck i guess. These will come back but TF and MC are like broken arrows as the chairman went today. Amazing

Profit down grade from the dragon :' -(

From the dragon, it had to happen i guess. :-(

This may drop further before recovery. 41p ish Lookers 1.00p pdg 26p. Just for balance. Gla

I agree been topping up yesterday afternoon and this morning. However new car sales worry me somewhat. But vertu have strong aftersales and used car operations. Barring no profit warning before finals this is good for 48p in the new year. Got to ramp when u have 80k in it now :-)) glup.

Jolly long time no here. Averaging down for me 87000 down to 44.5p. Took some profit and banked it at 48p In at the dragon at 29.5p and lookers at 109p may have to wait till 2018 to see any profit i think Gla

Yes last year October 25th. I worked with TF and MC. T ok but MC a strange fellow ( keeping it clean don't want to get banned ) but who else would take this business on. Anyway they seemed to have cleaned it up from when i left. ( ex vardy ) managed 4 years needed a medal the size of a dustbin lid. Retired now thank god :-))

You could be right pageyboy. However if u look historically October is when motor trade stocks are at their lowest. But new car sales worry me somewhat, but again vtu, look and pdg all have good aftersales and used car operations. Hopefully by March next year ( medium term ) will see some gains from my entering point of 29.5p. Finger crossed.

I've had a go with the dragon. But they look like good value. As ever time will tell.

I've invested in lookers, but looks cheap so worth a punt with the divi just round the corner.

Great cost control, lots of cash in the bank, increased divi ( .55% ) increase in service plans. Ok u can pick holes new car 14% down. But overall good numbers. 3 million more share buy back, should take sii down to 387m In line with market expectations.