Interim results for the 6 months ended 31 August 2019

Strategic highlights

  • Values driven business with well invested systems infrastructure and experienced leadership team
  • Financial position enables growth of franchised businesses with Manufacturer partners
  • Developing omni-channel retailing to be at the forefront of the transformation of the automotive retail experience
  • Strong portfolio management and capital allocation including divestment of sub-scale outlets, disposal of surplus properties, share buyback programme and further acquisitions being assessed

Unaudited interim results for the six months ended 31 August 2019

Robert Forrester interview on latest results

Interview with Robert commenting on the results

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Analyst interview with Mike Allen.
Analyst interview with Mike Allen, Head of Research, Zeus Capital.
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Financial highlights

  • £86.7m (5.6%) growth in total revenues to £1.6bn, with like-for-like revenue growth of 2.3%
  • Strong cost disciplines exhibited, like-for-like operating expense growth in the period slowed to 1% (H1 FY2019: 7%)
  • Operating profit of £20.3m (H1 FY2019: £18.6m)
  • Adjusted[1]operating profit of £19.6m (H1 FY2019: £19.4m)
  • Profit before tax of £16.1m (H1 FY2019: £17.3m)
  • Adjusted[1]profit before tax of £17.1m (H1 FY2019: £18.1m)
  • Interim dividend up 9.1% to 0.6p per share (H1 FY2019: 0.55p per share)
  • Excellent cash conversion of profits with Free Cash Flow[1] of £14.6m generated (H1 FY2019: £1.9m)

Aftersales: Recurring high margin income

  • Continued focus on driving growth in vehicle service departments; like-for-like service revenues up 8.5%
  • Service internal rate increases implemented 1 March 2019 increased like-for-like gross profit by £2.2m (representing just under half of the 8.5% like-for-like service revenue growth)
  • Core Group service gross profit up £4.6m augmented by internal rate increase
  • Service revenues also aided by growth in average invoice value per customer visit through focus on vehicle health check process and pricing actions increasing retail recovery rates
  • Over 100,000 active Vertu service plans in addition to extensive manufacturer service plans delivering high retention levels
  • Reduced contribution from parts of £0.6m due to previously announced Ford parts distribution reorganisation; underlying parts and accident repair gross profits level

Movement in net cash: Tight management of working capital

  • Increased Free Cash Flow due to lower capital expenditure as anticipated
  • Continued cash generation from property disposals
  • Interest payments up due to higher new vehicle consignment stocking charges

Current trading and outlook

  • Board confident in future prospects for Group
  • Strategically well placed to capitalise on challenges and opportunities in the sector
  • New vehicle supply side considerations:
    • EU exit
    • Consumer confidence
    • Exchange rate movements
    • Impact of emission legislation on the market
  • Board believes the Group remains on track to meet its overall expectations for the full year

Results Past and Present

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