Vertu has millions of reasons to be cheerful

May 15 2008 by Graeme King, The Journal

THE boss of expanding Vertu Motors has said he expects the vehicle retailer to confound a declining market by keeping on growing after posting £677m of sales in its inaugural results.

Chief executive Robert Forrester said he was happy with the way the Newcastle plc was performing and despite the consumer spending slump he expected to report more growth in the months to come.

Vertu has accelerated from a standing start to become the UK’s 10th-largest motor retailer, employing 2,300 staff nationwide.

The chief executive, formerly with Reg Vardy before its buy-out by Pendragon, was speaking as Vertu published figures for its first 16 months.

Alongside turnover of £677m, Vertu posted pre-tax profits of £137,000 for the period to February 29. Earnings were low after a series of large acquisitions. Its main brand is Bristol Street Motors, acquired in March last year, and subsequent buys have been brought under the same umbrella. Mr Forrester is upbeat about car sales.

“There is no point in being downhearted – you’ve got to continue to be positive, though the market for new cars will get harder,” he said. “There are plenty of opportunities. If we grow at 10% and the market declines as expected by 2.9%, we will still be ahead.”

He said: “We have managed to create a Newcastle-based plc with 2,300 staff and more importantly we have created a lot of jobs in the North East – around 40 in our headquarters and the Sunderland call centre.

“We’ve managed to create quite a lot of economic dynamism in the region at a time when, as a region, we are losing plc head offices.”

Mr Forrester said Vertu had succeeded in extracting like-for-like growth of 23.4% from its Bristol Street acquisition, thanks to initiatives since the business was bought.

He said: “We have changed a number of things. We have brought in quite a number of new managers and aggressively attacked the market with offers. We have also invested in the dealerships.”

Vertu has recently gained agreement to buy back 10% of its shares, to enhance earnings, after Mr Forrester said he believed the City had undervalued the company. Shares in Vertu closed yesterday at 46p, up nearly 7% on the day.

PAGE TWO: The full results.