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Record revenue sees pretax profits rise to £26m for Gateshead’s Vertu

Gateshead-based Vertu Motors plc has revealed a 16.8% surge in revenue growth, which contributes to a record year of profitability for the automotive retailer.

A nationwide operator, Vertu sells new cars, motorcycles, commercial vehicles and used vehicles, together with related aftersales services.

Releasing its final results for the year ended 29 February 2016 this morning, Vertu saw revenues rise from £2,074.9m last year to a record £2,423.3m.

The firm, which boasts a network of 127 sales and aftersales outlets across the UK, also reported a 23.8% rise in pretax profits, with figures increasing to £26m up from £21m previously.

Since 1 March 2015 Vertu has grown its offering exponentially, acquiring 16 dealerships including Audi, Honda, Volkswagen, Mercedes-Benz, Jaguar and Land Rover.

The company said that such improvements in recently acquired businesses acted as a chief driver in increased revenue and profit growth.

The Vertu board now expects further deployment in coming months with £35m raised to fund future acquisitions readily available.

Robert Forrester, Chief Executive of Vertu said: “We have delivered significant revenue growth, which together with tight control of costs, has resulted in record profitability.

“This profitability, combined with strong cash flow, gives the board the confidence to significantly increase the dividend.”

The firm also reported a continued improvement in its aftersales performance, with gross margins up to 44.8% from 43.5% in 2015.

He continued: “We are particularly pleased with our aftersales performance. The last three years of strong new car sales, coupled with success in selling service plans to used car customers, provides the group with good visibility of this recurring high margin income stream.”.

“We have added further strength to the operational management team to support future growth and we continue to review a number of further acquisition opportunities.”

Mr. Forrester went on to say that the results mean that the board is looking to the future with confidence, adding: “Our acquisitions have been integrated quickly and efficiently and are performing encouragingly.

“March and April have been good months. We see a stabilisation of the new car market at these high levels.”

Don’t miss Rob’s Northern Powerhouse views in an interview with Bdaily here.