Vertu Motors (VTU) H1 2025 earnings summary

Executive summary

• Group revenue for H1 FY25 rose 2.9% year-over-year to £2.5bn, achieving record revenues and robust aftersales performance, with Vertu now among six UK automotive super groups exceeding £4bn turnover.

• Used vehicle like-for-like volumes grew 3.9% and gross margin increased to 7.3%, while new retail vehicle sales volumes fell 5.9% but outperformed the UK market's 11.2% decline.

• Retail BEV sales volumes increased 10.9% despite a 7.0% fall in the UK market, reflecting a strategic focus on electrification.

• H1 profits declined as anticipated due to cost inflation and increased headcount, but strong customer experience and employee engagement were maintained.

• Tangible net asset per share increased to 73.7p, with gearing at 23.1% and a strong balance sheet.

Financial highlights

• Revenue: £2.5bn (+2.9% year-over-year); gross profit: £273.8m (+2.5%); group gross margin stable at 11%.

• Adjusted operating profit: £34.4m (-16.9%); adjusted PBT: £23.5m (-25.4%); profit before tax: £22.1m (-26.6%).

• Basic EPS: 4.77p (-27.5%); underlying EPS: 5.20p.

• Net debt (excluding lease liabilities): £83.9m, down from £90.7m.

• Interim dividend per share increased to 0.90p (+5.9%).

Outlook and guidance

• September trading in line with prior year; full-year profits expected to meet market expectations.

• H2 profitability expected to improve due to a stronger used car market and enhanced trade values.

• All UK retail outlets to rebrand as Vertu by April 2025, expected to deliver cost savings.

• Cautious outlook for new vehicle profitability due to ZEV mandate and potential market volatility.

• Aftersales and used cars expected to remain resilient, with supply constraints supporting used car margins.