Car dealer is still beating the odds

Mar 6 2009 by Graeme King, The Journal

MOTOR dealer Vertu Motors has reported a 16% drop in the number of new car sales, but is remaining upbeat since rivals are seeing an average 27% fall.

Vertu, based in Newcastle and trading under the Bristol Street name, says it is managing to make a profit and is paying off debt, despite the sales fall from September to January.

Chief executive Robert Forrester that said despite the car sales business suffering overall the UK’s tenth biggest motor dealership chain was managing to increase its market share, and had seen a 12% like for like increase in used car sales.

The company has had to make some redundancies across its business, with 100 staff leaving the business over the last 12 months.

But Vertu still boasts a workforce of 2,100 nationwide, and has recently been recruiting in the North East.

A new Bristol Street Car Nation site has opened in Darlington, and Vertu is also setting up a new call centre at is Vauxhall dealership on Scotswood Road in Newcastle, creating six new roles.

In a pre-close statement, Vertu said it expected full year results to February 28 to be in line with analysts’ expectations, which are currently looking for sales of £747m, with pre-tax profits of around £3m.

The company also said it believed the tough market place might present the business with opportunities when its rivals suffer.

Mr Forrester said: "As long as we keep beating the market, I can’t ask for much more. We have got a profitable business, we are generating cash and are paying off debt."

"We are selling two used cars for every new one, and in overall terms will sell just as many cars as last year. The business is operating in the face of reasonably challenging market conditions and has put up a good performance."

He added: "We expect the market to remain challenging, but this is providing some interesting value opportunities."

Mr Forrester said Vertu had needed to cut costs.

He said: "We are constantly looking at what we do, and to take costs out. We have made more than 100 redundancies over the last year but we have also just opened up in Darlington, creating 26 jobs."

Vertu shares fell nearly 5% yesterday to close at 20p.

Meanwhile North East car dealership chain Hodgson was yesterday celebrating figures showing that February half term week was the most successful in the company’s history.

The business, which has its 50th anniversary later this year, secured 151 new car deals during the week, 28 of which were in Hodgson’s Mazda franchise.

The business operates four franchises - Mazda, Suzuki, Toyota and Mitsubishi, and employs more than 140 staff.