Vertu said today that its adjusted profit before tax for the year ending 28 February 2025 will be “significantly below” current market expectations due to distortions created by the ZEV Mandate.
It said retail new car sales across the UK were standing at a 25-year low with higher volumes of lower margin fleet business.
It added that used car profitability was also being hit by subdued consumer confidence and heavy discounting of new cars, which is likely to intensify with the ramp up of EV Mandate targets to 28% from 22% last year. A bright spot was aftersales which remained resilient.
Costs are also rising. Vertu has put aside £12m to deal with Budget increases in minimum wage and National Insurance that come into force in April.
To reduce costs, it had made job cuts, closed most retail sites on a Sunday, improved efficiency through new technology and axed Bristol Street Motors and other subsidiary brands for just Vertu.
Verty Motors CEO Robert Forrester said: “The Group’s high margin aftersales business is performing strongly.
“However, the Government’s ZEV Mandate is causing severe disruption to the UK new car market, and the consumer environment is subdued.
“Despite these headwinds, the Vertu team is delivering, as seen by our significant market share gains in BEV new cars in the final quarter of the year. We now have award winning BEV dealerships with Citroen, MINI and VW.”
Vertu said it believes its shares are under priced and it announced a new £12m share buyback programme to tun to 28 February next year. compares to £7.5m spent on share buybacks in FY24, and £4.1m so far in FY25. The group is seen as a takeover target by foreign investors.
