Vertu Motors (VTU) H1 2026 Pre Recorded earnings summary

Executive summary

• Achieved record H1 revenue of £2,510.0m, up 1.4% year-over-year, with market share gains across all vehicle sales channels despite a challenging UK consumer environment and sector headwinds, including electrification mandates and a major cyber attack impacting Jaguar Land Rover dealerships.

• High margin aftersales business contributed over 45% of total gross profit, with continued investment in technology and digitalization to drive productivity, cost control, and customer experience improvements.

• Significant outperformance in BEV sales, with like-for-like BEV new vehicle sales up 82.4% versus market growth of 55.2%.

• Senior management structure enhanced with two new managing directors to increase operational bandwidth and support further growth.

• Strong cost control limited like-for-like operating expense growth to 0.3% despite inflationary pressures.

Financial highlights

• Revenue increased to £2,510.0m (H1 FY25: £2,474.6m), with group revenues up £35.4m, driven by acquisitions, though core revenues declined by £49.2m due to lower Motability sales and agency model transition in MINI dealerships.

• Gross profit rose 3.1% to £282.2m, with gross margin up to 11.2% due to higher mix of aftersales revenues.

• Adjusted profit before tax was £20.0m, down from £22.1m in H1 FY25, mainly from reduced new car profitability.

• Free cash inflow of £0.4m, impacted by a £21.2m working capital outflow, mainly from increased used vehicle inventory and reduced deposits.

• Net debt (excluding leases) at £78.3m, improved from £83.9m at H1 FY25, despite significant acquisition and share buyback spend.

Outlook and guidance

• Excluding the JLR cyber attack, full-year underlying profit before tax expected to be in line with market expectations (£27.2m consensus), with September trading profit ahead of prior year.

• Board remains cautious due to weak consumer and business confidence and uncertain macroeconomic conditions.

• Recent government BEV grants expected to boost H2 demand for new EVs.

• Motability market expected to recover from March next year as renewal cycles improve.

• Focus remains on maximizing existing portfolio and cautious capital allocation.