Car dealer Vertu Motors says electric vehicles hit by Sunak
The dealer reported an 11.7% rise in pre-tax profits to £31.5 million, and revenues grew over 20% to record levels of £2.4 billion, driven by acquisitions and growth in the core group, with full-year profits anticipated to be in line with expectations.
The group, which has outlets including the Macklin chain of dealerships in Scotland and the Bristol Street, Carrs and Vertu brands, described the results as strong.
The chief executive's comments came as Vertu said its results were boosted by its deal to buy Helston, its largest single acquisition, which completed at the end of last year.
Other acquisitions included the new dealership openings for the Toyota brand in Scotland, the Bristol Street Motor Nation outlets in Stockton and Tamworth and the BMW Motorrad acquired dealerships in Shipley and Rotherham.
It said the results from these operations were "satisfactory for the period and the operating losses were anticipated given the start-up nature of the Toyota and used vehicle outlets".
Vertu said trading in September - the licence plate change month - was strong, but it flagged caution over the consumer outlook.
"Future consumer confidence levels will be key in determining future retail vehicle demand and the board remain cautious in this regard," Mr Forrester said.
He said the UK Government could be causing confusion by announcing soon after delaying the ban that it will still impose stretching targets for car manufacturers to achieve specific zero emissions vehicle (ZEV) sales targets.
More than a fifth, 22%, of new cars sold by manufacturers in the UK next year must be zero emission, under the new rules, rising to 80% in 2030.
Mr Forrester said manufacturers are resorting to discounts and offers to try to boost flagging demand.
He said: "Increased supply of new electric vehicles from manufacturers is evident whilst retail demand (as opposed to fleet) remains muted.
"The Government's confusing messaging may further contribute to this.
"Manufacturers are therefore seeking to stimulate retail demand for these vehicles through the offer of discounted prices and supported finance rates.
"These market dynamics combined with the ZEV mandate have the potential to disrupt the recovery of the new car market in the next few years."
Recent industry figures from the Society of Motor Manufacturers and Traders (SMMT) showed retail sales of battery EVs fell 8.5% in the year to August 31.
However, fleet sales have been boosted - up 64.8% in the year to August - thanks to companies incentivising staff to buy them through salary sacrifice schemes.
Mr Forrester added that the falling retail demand was also being driven by higher electricity costs increasing running costs, the removal of the plug-in car grant scheme on June 14 and "inadequate UK public charging infrastructure", as well as rising insurance costs.
Andy Goss, Vertu chairman, said: "The group has continued to apply a multi-franchising strategy to maximise the profit opportunity in certain physical locations and to align with Manufacturer representation plans.
"Pruning activities have been successfully undertaken in the Period with the sale of an accident repair centre in Newcastle and surplus property held for resale, releasing capital to be redeployed to generate returns in excess of cost of capital. There is more cash to release from these activities."
Shares in Vertu Motors closed up 1.28%, or 0.9p, at 71p.
References
- ^ Car dealer warns of 'imbalance" in UK electric vehicle market (www.heraldscotland.com)
- ^ Electric options fail to fill the used car void (www.heraldscotland.com)
- ^ Major car dealer posts better-than-expected profit (www.heraldscotland.com)