Automotive retailer Vertu Motors (VTU) delivered ‘solid results’ for the year to February 2026. The Gateshead-based company also reported ‘positive current trading’ despite the multiple pressures facing the car retail sector.
Steered by CEO Robert Forrester, Vertu said trading in March and April has been strong and ahead of the prior year period.
Given this strong start to FY27, Forrester is confident of matching market expectations for FY27. He also insisted his charge is ‘excellently positioned to take advantage of the inevitable opportunities that will arise as the sector continues to consolidate.’
Shares in the AIM-listed firm fell as investors fretted over the impact of the Middle East conflict on fuel price volatility and consumer confidence.
However, Vertu is monitoring the impact of the war on vehicle demand. And the company insisted that ‘no material adverse consumer trends are visible today’.
Motoring ahead
Vertu Motors’ revenue ticked up 1.5% to £4.83 billion in FY26 despite subdued new vehicle sales caused by the Government’s Zero Emission Mandate (ZEV). Acquisitions added £154.4 million of revenue, while dealership closures drove a £53.3 million reduction in sales.
Adjusted pre-tax profits fell from £29.3 million to £24.5 million. But this was ahead of market expectations, supported by tight cost control and strong growth in Vertu’s ever-reliable aftersales business.
Vertu’s new vehicles performance was impacted by lower volumes of Motability sales, weaker retail margins as a result of increased upfront discounting and reduced support from manufacturers.
While the new car market remains tough, Vertu is increasing its exposure to fast-growing Chinese brands such as BYD and Geely. Vertu plans to add more Chinese brands to its portfolio, with names like Jaecoo, Omoda and Chery expected to join the roster in the months ahead.
The UK used vehicle market remained resilient in FY26, with Vertu delivering flat like-for-like sales volumes.
What did the CEO say?
Vertu delivered £30.7 million of free cash flow in FY26, bolstering an already strong balance sheet. Net debt (pre-leases) was £61.3 million, slightly better than forecast. And the company continues to return capital to shareholders through dividends and earnings-enhancing buybacks.
Forrester said: ‘The group has delivered solid results against the backdrop of sector pressures from the Government’s ZEV mandate on new car profitability, as we have focused on controlling the controllables, such as aftersales and cost.’
He added that Vertu is benefiting from ‘stable management, a highly trained and committed workforce, strong cashflows funding a maintained dividend, another £12 million share buyback and significant asset backing.’
Analysts’ views
Stifel upgrade its price target from 76p to 80p following the results. ‘We view this as an encouraging update from Vertu,’ said the broker, ‘and believe the group’s scale and highly experienced management team mean it is well-placed to navigate through the current structural market adjustment and continue its track record of continuous profitability since its inception almost 20 years ago.’
Progressive Equity Research’s Ian Robertson believes Vertu’s current valuation looks undemanding. ‘As and when the market recovers, possibly as a result of changes to the BEV mandate, we believe there could be significant upside to forecasts. At present, however, Vertu’s shares command an undemanding P/E and stand at a significant discount, 18%, to tangible net asset value (NAV).’
Disclaimer: James Crux has a personal investment in Vertu Motors.
Read the press release here: https://investors.vertumotors.com/investors/
You might also like these stories:
