AM 100 heavyweight Vertu Motors plans to operate all its retail outlets under the Vertu banner by April – ditching the Bristol Street Motors and Macklin Motors brands – in a bid to enhance marketing efficiency and drive cost savings.
Bristol Street Motors played a pivotal role in shaping the Midlands’ motoring landscape over the last 100 years. From its humble beginnings to becoming a cornerstone of the community, the dealership has witnessed the evolution of the automotive industry. It went on to form the basis of Vertu Motors, now one of the UK’s largest motor retailer groups, when it was established in 2006.
In 2010, Vertu Motors expanded into Scotland, where it trades under the Macklin Motors brand whose dealerships represent Ford, Hyundai, Kia, Mazda, Nissan, Peugeot, Vauxhall and Toyota.
Speaking to AM, Vertu chief executive Robert Forrester explained: “We’re now one of six ‘super groups’ in the UK, and I think we have to compete with those super groups.
“The distinction between volume dealerships and premium dealerships is very outdated. We’ve got MG selling £65,000 cars. We’ve got Ford selling £50,000 cars. What is a premium and a volume dealership in the new world? Very difficult to differentiate.
“The manufacturers were keen on the Vertu brand,” he added. “It’s more modern. I think people like that brand and this will give us, we think, significant cost savings, significant efficiency. It is going to simplify our business, just having one brand and we thought it was the right time to do it.”
Forrester cited the example of Bristol Street Motors nationally advertising on Sky TV, while having no actual dealership presence in Scotland. Similarly, Vertu Motors advertising within the grounds of Sunderland Football Club offered no benefit to the Bristol Street Motors dealership a mile away.
“This is fairly logical stuff,” he said.
The Vertu Motors chief’s comments on the rebranding initiative came as the group delivered its first half performance ending August 31.
The group delivered a solid financial performance for the six months ending August 31, despite challenges in the wider market reflected in adjusted pre-tax profits falling from £31.5m to £23.5m, driven by inflation, higher depreciation costs on electric demonstrator vehicles, and greater headcount aimed at supporting future growth.
Total group revenue increased by 2.9% compared to the first half of FY24, driven by strong aftersales and used vehicle performance.
Forrester noted the group’s resilience and adaptability, stating: “I am pleased with the group’s first half performance against a fast-shifting market backdrop. Our high-margin aftersales business delivered an excellent H1 performance, aided by higher technician numbers and execution of the group’s vehicle health check process.
Group aftersales operations were a key contributor, delivering a core gross profit increase of £7.1 million. Used vehicle volumes also grew by 3.9% on a like-for-like basis, with the gross margin improving to 7.3%.
Forrester highlighted these gains as critical to the group’s success, particularly in a market where new vehicle sales had come under pressure.
“We saw strong growth in used vehicle sales and aftersales which significantly supported our profitability,” he noted.
While used vehicles performed well, new retail vehicle sales volumes fell by 5.9%, outperforming the overall UK market, which saw an 11.2% decline.
Vertu Motors managed to grow its retail battery electric vehicle (BEV) sales by 10.9%, despite a 7.0% fall in BEV sales across the UK.
Forrester acknowledged the market volatility caused by regulatory changes but pointed to the group’s market share gains: “We took considerable market share in the new retail market and in the BEV market in particular, reflecting the group’s adaptability and strong operational execution.”
Vertu Motors’ balance sheet remains robust, with a gearing ratio of 23.1%, well below target levels. Tangible net assets per share increased to 73.7p, up from 70.9p in H1 FY24. The group also continued its share buyback programmre repurchasing 3.3 million shares at a cost of £2.4 million, with plans to extend this further.
The company declared an increased interim dividend of 0.90p per share, which will be payable in January.
Commenting on Vertu’s financial strength, Forrester said: “The group’s strong balance sheet, excellent portfolio of brands, robust and scalable systems, and a strong and experienced leadership team with motivated colleagues puts us in a great position from which to deliver on our strategic goals.”
In September, like-for-like new retail sales volumes rose by 5.2%, compared to a 1.8% decline in the broader retail market, and BEV sales more than doubled year-on-year.
Looking ahead, Vertu said it anticipates improved profitability in the second half of the year, supported by a stronger used car market and enhanced trade values.
Despite inflationary pressures on wages and salaries, the company said it is confident in managing costs through efficiency initiatives.
“We are actively pursuing value accretive growth opportunities to enhance our portfolio, applying strict investment return metrics as well as returning cash to shareholders,” Forrester added
