Vertu Regulatory News (VTU)

5 Mar 2008 07:00

Vertu Motors PLC05 March 2008 Vertu Motors plc ("Vertu" or the "Group") Pre-close Trading Update 5 March 2008 Vertu Motors plc, the UK's 10th largest motor retail group, is pleased toprovide the following trading update. Following the completion of the financial period ended 29th February 2008, theBoard can confirm that the trading performance of the Group is in line withmarket expectations. The Group continues to expand and, on 1 March 2008, it opened a new BristolStreet Motor Nation used car outlet in Doncaster. We continue to look atexpansion opportunities across all of our core businesses of car and commercialfranchise operations and used car outlets. The new car market has remained resilient in the second half of 2007 and into2008, despite the perceived weakening in the underlying consumer environment.National new car registrations to private buyers in the September to Januaryperiod rose 0.8% compared to the prior year. On a like-for-like basis forBristol Street Motors' dealerships, new car volumes sold to private customersrose 10.3%. This growth reflected strong consumer offers and incentives todealers by manufacturers, coupled with improvements in business processes in thesales arena. The used car market remains stable with residual value trends in line withprevious years, except for the nearly new market, which continues to be impactedby the strength of the new car offers. On a like-for-like basis for BristolStreet Motors' dealerships for the period September to January, used car volumesincreased by 29.4% year on year. The launch of a new internet proposition on 1October 2007 has been a contributor to delivering this sales growth. It is thestrategy of the Group to increase sales of used vehicles at each franchisedoutlet so as to build an increased vehicle parc with which to increase thehigher margin aftersales business. Used vehicle margins have continued to be atlower levels than historically achieved by the business as the Group increasesthe volumes of vehicles sold. Like-for-like used car volumes in the Bristol Street Motor Nation used caroutlets rose 2.0% in the September to January period. The strategy in theBristol Street Motor Nation business has been to reduce stock levels whilstseeking to maintain sales so as to improve stock turn and financial returns. The overall commercial vehicle market has seen growth in registrations in theperiod since 1 September 2007 in both the light and heavy vehicle sectors.Order levels have improved, particularly in the heavy vehicle sector. Long leadtimes, due to supply constraints, are a current feature of the market. Outlook The first month of the new financial year is March and this reflects the largestsingle month for vehicle sales and dealership profitability in the year. Newcar order levels coming into this crucial month remain on plan. Sales in theremainder of the month are, however, important for the Group. Whilst the Group is aware of the challenging market conditions in the UK, itlooks forward to continuing to gain market share and to delivering against itsstated strategy in the year ahead. - Ends - For further information please contact:Robert Forrester, CEO, Vertu Motors plc, Tel: 0191 206 4617Karen Anderson, FD, Vertu Motors plc, Tel: 0191 298 6514 Andrew Kitchingman, Brewin Dolphin Securities, Tel: 0845 270 8613 Billy Clegg/Edward Westropp, Financial Dynamics, Tel: 020 7831 3113 Notes to editors Vertu Motors is the 10th largest motor retailer in the United Kingdom with 47dealerships forming a national network across England, operating under theBristol Street Motors and Bristol Street Motor Nation brands. Manufacturingpartners include Citroen, Ford, Iveco, Honda, Peugeot, Renault, Vauxhall, FiatCommercials and Hyundai. Vertu Motors was established in November 2006 with the aim of consolidating theUK motor retail sector. The company listed on AIM in December 2006 and raised£25m. The Executive Directors are experienced within the sector, havingpreviously held senior positions within Reg Vardy. In March 2007, the Group acquired the 13th largest motor retailer in the UnitedKingdom, Bristol Street Motors. In the summer of 2007, Vertu acquired BlakeHoldings, Grantham Motor Company Limited and a Ford dealership in Morpeth,Northumberland. In March 2008 the Group opened a new Bristol Street MotorNation outlet in Doncaster. It is intended that the Company will continue to acquire motor retail operationsin the form of franchised dealerships and used car only operations. TheCompany's acquisition strategy is supplemented by a focused organic growthstrategy to drive operational efficiencies through the national network. www.vertumotors.com This information is provided by RNS The company news service from the London Stock Exchange