Vertu Motors, the car sales group that saved jobs at a collapsed Edinburgh dealership in January, today said it is eyeing a strong pipeline of other acquisition opportunities.
In a trading update chief executive Robert Forrester said scale will become increasingly important in the car sales sector and that the firm had a “robust” balance sheet to be able to take advantage of opportunities.
In January the group acquired a multi-franchise dealership in Edinburgh selling Kia, Mitsubishi and Suzuki from the administrators of Leven Cars Group. Vertu said today that the business is now fully operational and integrated into the group.
“The acquisition is expected to be earnings dilutive in the first full year of ownership by the group as the business is turned around,” it added.
In the trading update for the five months to 31 January Vertu said like-for-like new retail vehicle volumes were 9.4% lower although margins were stable. But it saw strong growth in fleet car sales volumes, significantly outperforming the wider market. Growth in like-for-like used vehicle margins was also achieved.
Forrester said the board believes the full year trading performance for the group will be in line with expectations. “This result has been achieved through the deployment of discipline, hard work and sector leading systems. Scale will become an increasingly important success factor as the sector evolves and the current pipeline of potential acquisition opportunities is strong, with our robust balance sheet only being deployed after rigorous capital allocation testing."
In a separate deal with the administrators of Leven Cars, Grange Motors bought Leven’s Rolls-Royce and Aston Martin dealerships in Edinburgh. Together the two deals saved 101 of the 139 jobs at the collapsed business
Vertu is the fifth largest automotive retailer in the UK with a network of more than 120 sales outlets across the UK. Its Macklin Motors brand operates dealerships across the Central Belt of Scotland
It also runs dealerships under the Bristol Street Motors and Farnell brand names.
