VERTU Motors has become the UK's biggest Honda dealer after buying three more dealerships from Springfield Cars. The Gateshead-based business is paying £3.7m for the trade and assets of the dealerships in Newcastle, Sunderland and Durham.
He said: “We are pleased to have acquired these Honda dealerships in the North East.
“We will integrate these new sites into our existing portfolio of Honda dealerships which is already well established in the East Midlands and Yorkshire, with a strong operational management team.
“We are delighted to be growing our representation with Honda, and in so doing, becoming their most significant franchise partner in the UK.
“These are well-established businesses, and we are confident that they will quickly generate a positive return for the group.”
Vertu, which mainly trades as Bristol Street Motors, Vertu Honda and Macklin Motors, has 89 sales and servicing outlets around the UK. In addition to its 10 Honda sites, it has franchises for Alfa Romeo, Citroen, Fiat, Ford, Hyundai, Iveco, Mazda, Mitsubishi, Nissan, Peugeot, Renault, SEAT, Suzuki and Vauxhall.
The three new sites had a combined turnover of £29.2m in 2011 and made an operating profit before interest and tax of £0.3m. Vertu said the timing of the acquisition meant the additions were likely to make a small loss in the three months to the end of the group’s current financial year but to become earnings enhancing in the financial year ending in February 2014.
Vertu said the Durham and Sunderland dealerships will be leased from Springfield and Springfield has bought shares in Vertu worth £0.3m, which it has undertaken not to dispose of for 12 months.
Vertu was set up in November 2006 and listed on the AIM a month later, with a strategy to consolidate the UK motor retail sector. It says it intends to do this through organic growth as well as continue its expansion through acquisition.
It has added 13 new outlets since March this year and has grown the group’s staff to more than 3,250 nationwide.
In the first half of its financial year, Vertu grew profits by almost 15% to £628.1m, while pre-tax profits were up by 26.8% to £5.2m.
This was fuelled by improvements in the car market, which saw a 7.9% like-for-like increase in volumes, while used vehicle volumes and margins were 13.2% higher.