CAR retailer Vertu Motors has said its sales and profits are ahead of budget for the year, boosted by factors such as a growth in its servicing and bodyshop operations.

The Gateshead-based company has swelled to a position as Britain’s eighth largest car dealer on the back of a series of acquisitions, adding around a third of its 75 sales outlets in the last year. The company raised £30m with a share placing in 2009.

In a trading update ahead of the release of its preliminary results in May, the company reported an “encouraging trading performance” in the first six months of the year, remaining strong in the second half. It said its performance is expected to beat market expectations, with both sales and pre-exceptional operating profits ahead of both budget and the previous year.

It said volumes of used cars sold in the five months to January 31 rose by 9.6% on a like-for-like basis, although private new car sales volumes went down by 6.1% in the same period. Sales of fleet and commercial vehicles rose 2.6%.

Over the year the company focused on initiatives such as servicing older vehicles and additional aftercare services, and as a result overall gross margins in aftersales rose 42.2% compared to 41.8% in the same period the previous year, with like-for-like profit growth in service, parts and bodyshop operations.

Vertu’s acquisition strategy - which has seen the group’s sales outlets grow from 45 in 2009 to 75 today - progressed on February 22 with the purchase of the entire share capital of Patrick (Holdings), which operated the Patricks of Durham Vauxhall franchise. The £1.5m deal brings the group’s Vauxhall dealership roster up to 10. The dealership had a turnover of £7m in 2010, and Vertu expects it to be profitable immediately.

The company said: “The board remains confident that the progress being made by the core business and those dealerships acquired in this and the previous financial year will continue to generate further profit growth for the Group.”