Half Year 2025 Vertu Motors PLC Earnings Call Transcript
Key Points
- Vertu Motors PLC (LSE:VTU) achieved record revenue levels with growth in most areas, particularly in aftersales and used cars.
- The company outperformed the market in battery electric vehicle sales, with a 10.9% growth compared to a 7% decline in the retail market.
- Vertu Motors PLC (LSE:VTU) has a strong balance sheet with tangible net assets per share at 73.7p and gearing below target at 23%.
- The company announced an extended share buyback program, demonstrating financial strength and commitment to shareholder returns.
- Operational excellence is highlighted by high customer satisfaction scores and a strong workplace culture, with an 84% great place to work score.
- The new car market in retail was weak, with UK registrations falling by 11.2%, impacting Vertu Motors PLC (LSE:VTU)'s new vehicle margins.
- Cost pressures, particularly in payroll and vehicle costs, continue to be a concern for the company.
- The government's ZEV mandate is causing market distortions, leading to excess supply of electric vehicles and impacting margins.
- The company experienced a free cash outflow of GBP14.3 million in the period, driven by increased used vehicle inventory and reduced creditors.
- Vertu Motors PLC (LSE:VTU) faced increased interest costs due to higher interest rates and increased pipelines of funded new vehicle inventory.
Good morning and welcome to the presentation of our interim results for the period to the August 31, 2024. If we look at the advantages that the group has Vertu is now one of the six super groups operating in the UK automotive sector, retailers with a turnover in excess of GBP4 billion. We're the only remaining major listed automotive retailer and we were founded in 2006.
We certainly have scale as part of that group of super groups, but we've also got financial capacity, operational capacity and the manufacturers support with which to continue growth and to be part of that pack scale provides us with that growth pack path and also the benefits of the economies of scale.
As we go through the presentation, we'll also show much evidence of operational excellence. We are outperforming our competitors. The group has significant financial strength supported by our capital allocation policy and we seek to balance organic growth inorganic growth, dividends and buybacks.
We've got high asset backing, a
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