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Business interview: Robert Forrester, Vertu

Robert Forrester aspired to be prime minister while at school . Picture: Contributed

Robert Forrester aspired to be prime minister while at school . Picture: Contributed

  • by DOMINIC JEFF
 

HE MAY have been in Edinburgh to visit two recently-acquired Hyundai dealerships to consider what investment they need, but Vertu chief executive Robert Forrester was keeping a close eye on every one of the firm’s 106 outlets.

Just about every statistic for the company he founded as a cash shell in 2006 is updated in real time to his tablet, so he knows what cars have been sold, where, and by whom.

It’s a Monday and 111 have been shifted by lunchtime. By the time he’s preparing to fly down to Birmingham to inspect some more dealerships, the tally has hit 162. He says that on a Saturday “it’s like watching the football results coming in”.

No wonder Forrester admits he’s not a good driver, because his mind is always on other things. Neither is he a petrolhead, despite more than 12 years in the trade.

“But I like the car sales business, because its very complicated,” he says. “We are selling new cars, used cars, servicing, finance; cars to fleets, to individuals. And customers will pay you in part with an old car.”

Such is his obvious drive that it’s hard to know if he’s joking when he says he once considered entering academia by doing a PhD on the migration of 19th century Swedish peasants. The professor he was working under told him he was too competitive and he trained as a chartered accountant instead.

The work gave Forrester his first taste of the motor trade, but he soon found himself in property investment as a director at Brookhouse in Manchester, before a near-death experience provided the catalyst for a move.

He was lucky that his girlfriend at the time – Helen, now his wife and mother to his three children – was a doctor. She diagnosed his meningitis over the phone from her home in Newcastle and he got to hospital just in time.

A decade later, Forrester picked his wife’s Scottish-sounding maiden name as Vertu’s trading brand north of the Border, Macklin Motors.

As he recovered he decided to move to the north east of England, and landed the job of finance director at legendary car dealership Reg Vardy.

By the time the dealership was sold to listed rival Pendragon in 2006, Forrest was managing director. Finding himself surplus to requirements, he teamed up with fellow Reg Vardy executives to build a new player in the UK car dealership sector, headquartered in Newcastle.

Vertu was launched with a £25 million placing on the Alternative Investment Market and has now raised a total of £131m.

Forrester checks to see that investors can still feel well rewarded: they can – Vertu’s share price values it at well over £200m – but he says he prefers to concentrate on the basics of the business and then the shares will take care of themselves.

“The market will always find its level, and it will always out you,” he says.

Forrester’s faith in open markets served him well during the financial crisis. It meant Vertu was not caught with significant debt on its books when credit conditions tightened, and indeed it was able to raise more cash to continue its acquisition spree at lower values. It was ideal for the kind of consolidation strategy the board was pursuing.

“I don’t want to buy a good business,” he says, although he admits some of the dealerships Vertu has swallowed were in good shape.

But he added: “A lot of the dealerships that we bought were in a pretty bad way. If you can get the right management and people in, you can create a lot of shareholder value.”

He says his experience of property management helps in turning round the businesses, but people are the key factor.

“In an industry where we make 1 per cent margins on sales, if you have people with no drive or energy in a team it means you are going to make a loss,” he says.

He adds that consumer demand has been picking up so fast in recent months that recruitment has struggled to keep pace.

A long-standing member of the CBI’s economic affairs committee, he says the British economy is in far better shape than the official statistics show.

During and immediately after the recession, he saw customers deferring services and even giving up their cars altogether. Vertu was caught holding £20m worth of second-hand cars as values tumbled by 5 per cent a month.

Faced with losing £1m a month on top of terrible trading conditions, Forrester “went aggressive” and promoted heavily to reduce the stock and keep sales moving.

“Where we are now is 180 degrees in the other direction,” he says. “We are putting more people into dealerships. In the last six months we’ve not had enough people to cope with the level of sales.”

Although he is reluctant to set targets – “what happens when you get there?” – Forrester is planning to keep expanding Vertu’s portfolio, including the Macklin estate. He says he is in talks to buy more Scottish dealerships, and is not overly concerned by the prospect of the independence referendum.

“People in Scotland will still be buying cars.”

30-second CV

Job: Chief executive, Vertu Motors.

Born: Blackburn, 1969.

Education: Oxford University, St Hugh’s College.

First job: Accountant at Arthur Andersen.

Ambition while at school: To be prime minister.

Car you drive: Range Rover Sport – but I’ll only drive a car we sell, so I had to wait until we bought a dealership in June.

Your favourite music: Brass bands.

Can’t live without: Fitbit fitness tracking gadget.

What makes you angry? Mediocrity.

Best thing about your job: The ability to see people flourish and develop their lives through taking responsibility and making a difference.

 

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