Macklin Motors owner Vertu ups profits again as Scottish expansion accelerates
Car dealership group Vertu has further upgraded its profit outlook amid “sector tailwinds” and provided more details on its Scottish growth plans.
Last month, the firm said its Macklin Motors brand was looking to develop four dealerships after being awarded the Toyota franchise in the west of Scotland.
The first dealership is to be located at Darnley, to the south of Glasgow, with a planned opening date of April 1. It replaces the current used car operation.
Vertu Motors, which has a network of 159 sales outlets across the UK, already operates three Toyota outlets in the East Midlands.
In a trading update ahead of May’s full-year results, the group confirmed that the additional three new Scottish Toyota dealerships would be at new locations.
Meanwhile, as part of planned re-franchising activity at Macklin’s premises in Dunfermline, the Renault and Dacia franchise has been added to the Fife dealership to operate alongside Vauxhall, which opened in July.
A further additional franchise outlet for Hyundai will be added “in the coming days”, completing the development.
In January, a newly built freehold dealership opened in Newbridge, Edinburgh representing Kia and Peugeot. These franchises relocated from leasehold premises on the expiration of the lease.
The MG franchise was also included in the new development with the business having been acquired last December.
Details of the Scottish changes came as Vertu updated investors on trading over the five-month period to the end of January.
Bosses are now anticipating an adjusted profit before tax of “not less than £75 million” for the full year. That compares with previous guidance of no less than £70m, and prior to that no less than £65m.
Chief executive Robert Forrester said: “This further upgrade would not have been delivered without a significant team effort and I would like to thank every single one of my colleagues for their hard work and dedication.
“The trading results have been aided by sector tailwinds and limited vehicle supply leading to augmented margins. In addition, recent acquisitions have contributed at a higher level than initially envisaged due in part to a swift and successful integration process.”
The group also highlighted a number of developments including adding 29 sales outlets to its portfolio since December 1, 2020, and a new share back programme amounting to £3m.
It said it had delivered “significant growth” in like-for-like vehicle sales margins and gross profit generation in all channels compared to the previous two financial years.
In the five-month period under review, new vehicle supply constraints restricted fresh supplies of used vehicles into the market.
This constrained supply drove the average price of a used car in the UK up by 25 per cent year-on-year and by approximately 8 per cent over the period.
Overall, the group sold 32,658 used vehicles to consumers in the period.
Bosses noted that “supply-side issues”, driven by component shortages and Covid-related factory capacity constraints were the primary reason for the continued subdued new vehicle market, rather than a lack of demand. The group pointed to record new vehicle order banks.