Vertu unveils Scottish expansion drive as it smashes forecasts

Gateshead-based Vertu – which has bought two dealerships north of the Border this year – unveiled a full-year profit of 4.6 million for the 12 months to 28 February, compared with just 70,000 in the previous year. Revenue raced ahead from 761m to 819m after its number of sites rose from 44 to 60.

Chief executive Robert Forrester told The Scotsman that the business had generated 23m of net cash, adding to the war chest at his disposal to fund his expansion plans.

He said: "Last year proved to be a much stronger trading period than anticipated, due to the twin supports of the UK government's scrappage programme and the strengthening of used car values.

"The 30m placing undertaken in June provided the group with the firepower to grow the number of sales outlets significantly in the last 12 months. The group's strong cash position and continued cash-generation means we can continue our growth in 2010 and beyond and gain the scale benefits of this growth."

Forrester said that current trading has been "robust", with new car retail volumes up 16.1 per cent in March, boosted by the final month of scrappage. He said the company planned to pay both its maiden interim and final dividends during its current financial year.

Vertu – which trades under the Macklin Motors brand in Scotland – was launched as a cash shell in December 2006 and bought Bristol Street Motors, at the time the UK's 13th-largest car dealer, in March 2007.

The group has since grown to be the ninth-largest UK chain.

Analysts at Panmure Gordon, Vertu's investment adviser, said the company had beaten their profit expectations by 15 per cent, despite upgrades to their forecasts during the year.

The analysts added: "We continue to believe the shares look attractive both from a long-term growth perspective and relative to its peers in light of recent relative under-performance and, therefore, reiterate our 'buy' recommendation."