Shares in Vertu Motors (LON:VTU) ticked higher after the automotive retailer reported strong H1 results showing record revenues. Steered by CEO Robert Forrester, Vertu also delivered its third upgrade to FY27 profit guidance since the start of the financial year.
The upgrade was driven by a ‘strong start’ to H2 across all areas of the business. And investors applauded a bigger-than-expected reduction in net debt as well as Vertu’s growing traction with fast-growing Chinese brands.
Record H1 revenues
Strong results for the half to August 2026 revealed record revenues of almost £2.6 billion, including like-for-like revenue growth of 4.3%. Adjusted pre-tax profits revved up 19% year-on-year to £23.8 million as gross profit grew across the business.
Vertu made positive progress in an improving new car market. Furthermore, its higher margin aftersales business continued to drive profit growth, aided by retention from customer service plans.
| H1 FY27 | H1 FY26 | |
| Revenue (£m) | 2,596.5 | 2,510 |
| Adjusted pre-tax profit (£m) | 23.8 | 20 |
| Net debt (£m) | 54.2 | 78.3 |
Source: Vertu Motors, H1 results
Encouragingly, Vertu generated an 8.4% increase in like-for-like new vehicle sales boosted by new Chinese brands, with a proportion of their growth coming from pre-registrations.
And the firm’s BEV (battery electric vehicle) new retail sales volumes grew 125.6% against market growth of 75.9%.
Guidance upgraded again
The AIM-listed firm said trading during the important plate change month of September proved stronger than anticipated on the back of a robust new car market.
And Vertu now anticipates FY27 results will be ahead of current expectations – as at 13 October, consensus called for adjusted pre-tax profits of £26.5 million with a range of £25.5 million to £27.1 million.
Following the update, Progressive Equity Research analyst Ian Robertson upgraded his FY27 pre-tax profit forecast by 8% to £27.5 million and raised his FY28 estimate by 2% to £25.6 million.
Focus on execution
‘The new car market is showing robust growth with retail sales rebalancing against fleet which aids retailer profits,’ commented Forrester. ‘A focus on execution is delivering tangible benefits. Value Cars by Vertu growing older used car sales is broadening the group’s used vehicle proposition. Investment in digital tools and operational discipline are improving productivity and customer conversion.’
Forrester added: ‘The group continues to reshape its portfolio to capture attractive growth opportunities, including automotive brands from China. We now have 20 Chinese automotive outlets, with more on the way.’
We have a positive stance on cash-generative Vertu, which remains well-placed to consolidate a fragmented UK market. Under Forrester, the company continues to showcase its resilience in the face of rising costs, weak consumer confidence and sector uncertainties.
Higher-margin aftersales continue to underpin and drive earnings. And the addition of further Chinese OEM representation should fuel future growth.
There is lots of value under the bonnet at Vertu, which continues to buy back shares and could become a takeover target if this lowly rating persists. Vertu’s undemanding valuation is underpinned by a strong asset base, with the shares trading a smidge above record tangible net assets per share of 80.8p.
Disclaimer: The author James Crux has a personal interest in Vertu Motors.
