I still cannot believe why this leading car retailer, with 192 sales and aftersales outlets, has not been snapped up by one of the Private Equity groups.
At the beginning of last week, the company issued a Trading Update for the five-month period to end-July.
CEO Robert Forrester stated that:
''I am pleased with the Group's performance against a fast-shifting market backdrop.
Our high margin, resilient aftersales business continues to thrive aided by higher technician numbers and strong execution of the Group's vehicle health check process.
The retail new car market remains weaker as the Government's regulation to transition to battery electric vehicles causes market volatility and negative impacts.
The current dislocation in the market presents opportunities for Vertu Motors to capitalise on, assessed using strict investment return metrics, with our strong balance sheet providing financial flexibility, an excellent portfolio of strong brands, robust and scalable systems, and a strong and experienced leadership team with motivated colleagues."
The group is delivering on its stated strategy and is well-positioned to take advantage of opportunities that arise whilst the market remains in an adjustment period, given its track record of execution and strong financial position.
The Board remains highly confident in the Group's long-term prospects.
So, too, does analyst Ian Robertson at Progressive Equity Research.
His estimates for the current year to end February 2025 are for revenues of £4,973m (£4,719m), with adjusted pre-tax profits of £42.2m (£37.1m), and earnings of 8.6p (7.8p) per share.
TDR Capital, the Private Equity group with over $15bn under management, has a strategy of partnering with strong, market-leading companies that have potential for robust growth and resilience through economic cycles, it has a near 10% stake in the Vertu equity.
It also has takes in ASDA, EG Group, David Lloyd Leisure, Stonegate Pub Company, Pizza Express, Hurtigruten, Aggreko and Arrow Global amongst many other notable positions.
So, what are its plans for Vertu – who knows.
However, I still fancy its shares, now 69p, for a recovery in price back up to hit my recent Target Price
(Profile 12.10.20 @ 30.5p set a Target Price of 40p*)
(Profile 03.07.23 @ 71p set a target Price of 80p*)
(Profile 17.01.24 @ 70.5p set a Target Price of 87p)
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