Macklin Motors owner Vertu gets revved up amid stalling car market

Vertu Motors, the car dealership group that trades as Macklin Motors in Scotland, expects a tough market for new car sales to throw up “opportunities” for growth as it flexed its financial muscle.

Robert Forrester is in the driving seat as Vertu's chief executive. Picture: Marc Schlossman

In a trading update, the group noted that new retail vehicle volumes continued to soften during the year to the end of February. It flagged a 6.8 per cent year-on-year fall on a like-for-like basis, though that decline is still less than the new car market as a whole.

Used vehicle volumes grew by 4.8 per cent on a like-for-like basis in a market where volumes are expected to have declined due to supply constraints and a “more subdued consumer environment”, Vertu added.

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The firm, which boasts a network of 125 sales and aftersales outlets across the UK, said it had adopted “more aggressive pricing strategies, gaining share at the expense of margin”.

Meanwhile, like-for-like service revenues grew by 7.4 per cent and overall aftersales margins were described as “stable”.

The board expects the group’s underlying trading performance for the year ended 28 February to be in line with current market expectations.

Chief executive Robert Forrester said: “Whilst the outlook remains uncertain, the group continues to be very well positioned to take full advantage of tougher markets which will, as has been the case in previous sector downturns, provide opportunities.

“We have a strong balance sheet, underpinned by a property-rich asset base with low levels of debt, a clear focus upon capital allocation and we have an outstanding and stable team.”

The firm noted that the UK’s imminent exit from the EU was creating “some uncertainty for the group’s private and business customers”.

It added: “In addition, unpredictability over tariffs and sterling levels create an unprecedented level of uncertainty for manufacturers and retailers alike on the future levels and profitability of new vehicle supply into the UK from the EU.

“Notwithstanding this, the board is implementing plans to deliver the inherent opportunities for improvement of operational performance and profitability that exist within the current dealership portfolio.”

Vertu is due to announce its full-year results to the stock market on 8 May.

Separately, the group confirmed the appointment of Karen Anderson as chief financial officer and as a director of the company with immediate effect. Previous incumbent Michael Sherwin has stepped down.

Vertu was established in 2006 with the strategy to consolidate the UK motor retail sector. It also trades under the Bristol Street brand.