Macklin Motors owner flags bumper profits but car supply and Covid concerns linger
In a trading update, the group also pointed to supply constraints in the new car market “potentially impacting profitability”, with a knock-on effect on the used car sector.
Bosses gave a cautious outlook for the full year despite flagging an “exceptional” performance during the first half.
The firm said used vehicle supply remained tight, particularly in the premium segment, though the group has been successful in maintaining inventory and sales volumes at higher levels than previously anticipated.
New vehicle supply constraints, amid an ongoing shortage of some components, have had “no material impact” on the group’s trading performance to the end of June, it noted.
The car industry has been struggling with a global shortage of certain semiconductor components which are used extensively in modern motors.
Vertu told investors: “New vehicle volumes and margins have remained strong. Service revenues and profits have, as expected, strengthened in recent weeks as the impact of the timing of annual service and MOT work mirrors the prior year’s lockdown and release.”
Adjusted profit before tax for the six-month period ending August 31 will be no less than £40 million, the firm noted.
It added: “At this stage, despite the exceptional performance during the first half of the year, the board retains a cautious outlook but nevertheless now anticipates that the group’s adjusted profit before tax for the current financial year ending February 28, 2022 will be in the range of £40m-£45m (previously £28-£32m).
“The board remains very confident in the prospects for the group, which is strategically well placed to capitalise on the changes and opportunities in the UK motor retail sector.”
Meanwhile, rival car dealership giant Lookers, which has a string of Scottish showrooms, said it had delivered an “excellent” first-half trading performance, despite continued disruption and uncertainty caused by the pandemic.
The group – owner of the long-established Taggarts business and some Audi dealerships in Scotland – flagged an underlying profit before tax of about £50m for the first half compared to a £36.1m underlying loss last year.