Vertu Motors (VTU) H2 2026 earnings summary

Executive summary

• Delivered resilient performance and maintained profitability for the 20th consecutive year, with revenue increasing to £4.83bn for FY26, up from £4.76bn, driven by acquisitions and start-ups despite a small decline in core revenues.

• Adjusted profit before tax fell to £24.5m from £29.3m year-over-year, impacted by sector headwinds and a cyber-attack at JLR, partially offset by insurance proceeds.

• Strong aftersales performance contributed 46% of gross profit, with record labour sales and a resilient service contract base.

• Disciplined cost control and a £10m cost reduction programme implemented, including headcount reduction and closure of loss-making dealerships.

• Net debt reduced to £61.3m (from £66.6m), with free cash flow at £30.7m.

Financial highlights

• Group revenues grew by approximately £70 million, with gross profit rising to £540.0m and gross margin stable at 11.2%.

• Adjusted operating profit declined 11.3% to £46.5m, and adjusted basic EPS decreased 13.2% to 5.71p.

• Free cash inflow of £30.7 million; net debt reduced to £61.3 million, excluding leases.

• Tangible net assets per share increased to 75.9p.

• Dividend per share held at 2.05p, covered 2.6x by adjusted fully diluted EPS.

Outlook and guidance

• Strong start to FY27 with profitability above prior year levels and record aftersales performance.

• Cautious on expansion due to economic uncertainty and ZEV mandate impact; focus remains on cost control, portfolio optimization, and targeted growth opportunities.

• Macro risks include Middle East conflict, inflation, and fuel price volatility, but no material consumer weakness observed.

• SMMT forecasts UK car registrations at 2.093m for 2026, with BEV mix revised down to 26.8%.

• £10m cost efficiency programme and operational improvements underway to support FY27.