The car dealer delivered an adjusted pre-tax profit of £9mln in June, swinging from a £14.2mln loss in the March to May period and ahead of its original business plan
In a trading update, the company said it had delivered an adjusted pre-tax profit of £9mln in June, swinging from a £14.2mln loss in the March to May period and ahead of the group’s original business plan of £8.6mln.
Vertu said all showrooms at its dealerships in England had reopened on June 1, while its 12 sales showrooms in Scotland opened back up on June 29.
The firm said it saw strong retail sales demand for both new and used cars and vans in June, although fleet volumes were more subdued.
Vertu added that a “very high proportion” of its aftersales departments had remained open during lockdown and saw “Increasing momentum” which in turn aided a “very strong, high-margin aftersales performance” in June as pent up demand was released.
It wasn’t all good news, however, as the company announced that it will cut 345 jobs, around 6% of its workforce, as part of an efficiency drive and technology improvements that it expects will deliver annualised cost savings of £10mln.
The group also said it had net cash of £9.7mln as of June 30, although given the ongoing uncertainty it did not provide forward guidance.
“The group’s cash position was much stronger than we could have hoped, despite the fact the Board has made the decision to ensure all suppliers are paid in full, on time, illustrating the discipline within the business”, Forrester said.
“The [coronavirus] crisis has driven an acceleration of technology uptake and we are embracing this trend to futureproof the business. As automation progresses, we have made the difficult decision to reduce group headcount by 6%, which contributes to £10mln of on-going annualised cost savings being identified”, the CEO added.
The company’s shares rose 5.5% to 24p in early deals.
Read More: Vertu Motors PLC higher as CEO says June trading stronger than expected, plans 345