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Gateshead’s Vertu Motors announce revenues of over £1 billion

Gateshead-based car dealership company Vertu Motors PLC has announced an increase in revenues of over £1.083 billion for the six months ended 31 August 2014.

The figure is up 29.5% from last year’s £837.2 million, whilst pre tax profit has risen 48.8% to £12.8 million from 8.6 million last year.

The company also announce net cash of £34.4 million for the period, again higher than the first half of 2013’s £25.7 million.

Other financial highlights included a healthy operating cash inflow of £15.9 million, earnings per share up 16.8% to 2.99p and a balance sheet underpinned by freehold and long leasehold property portfolio of £109.1 million.

Operational highlights for the company consisted of record trading performance driven by recently acquired businesses and favourable market conditions particularly in used cars and service areas.

It was also reported that growth strategy progressed with addition of six further sales outlets since 1 March 2014.

Moreover, like-for-like new retail volume increased 11.8%, ahead of the market, whilst like-for-like volumes of fleet cars rose 12.4% with commercial vehicles rising 28.6%, both with market share gains.

The company also reported lower overall group gross margin due to higher proportion of vehicle sales and lower core Group) gross margins in new retail, fleet and commercial vehicle sales as manufacturer supply push into the UK increases volumes.

Vertu also stated that service revenues up 4.4% in the core Group, reflecting ongoing success of customer retention strategy and margins strengthened due to strong core Group margins, up to 76.4% from 75.7%.

Furthermore, the board reportedly anticipates full year results will be in line with market expectations.

The board also noted that Peter Jones will start as Chairman on 1 January 2015 whilst strong pipeline of acquisition opportunities remain.

Chief executive, Robert Forrester, said: “The Board is delighted with this record first half performance.

“Recent acquisitions, the Farnell Land Rover business particularly, have made a strong contribution and the core business continues to benefit from management success in improving returns in the used car and servicing areas.

“We continue to deliver on the Group’s strategy to recruit and retain motivated and talented people in every dealership to ensure the business is management driven not market driven.”

“With the team we have in place, with the recently acquired businesses which should improve as our operating model is implemented, with a strong balance sheet and a healthy pipeline of acquisition opportunities, your Board looks to the future with confidence”