Vertu Motors Plc · LSE:VTU
Vertu Motors — H1 FY2025 Earnings Presentation
30 slides from Vertu Motors's earnings presentation, October 2024
Slide 1: Analyst and Investor Presentation Interim Results
1 Analyst and Investor Presentation Interim Results For the six-month period ended 31 August 2024
Slide 2: Vertu Advantages – Our Investment Case
2 Vertu Advantages – Our Investment Case Scale & Growth Shareholder Returns Operational Financial Strength Excellence
Slide 3: Highlights
3 Highlights • Total Group revenue for the Period increased by 2.9% compared to H1 FY24 • Group aftersales operations delivered a robust performance, delivering Core Group gross profit growth of £7.1m • Used vehicle like-for-like volume growth of 3.9% and gross margin increased to 7.3% • Group new r
Slide 4: Current Trading & Outlook
4 Current Trading & Outlook • Group September trading performance in line with prior year levels. The Board anticipates that full year profits will be in line with current market expectations • Key plate change month of September saw like-for-like new retail sales volumes up 5.2% with retail market
Slide 5: At a Glance
5 At a Glance 1 1 Net Debt (excluding lease liabilities)/Shareholders funds
Slide 6: Strategic Update
6 Strategic Update Robert Forrester CEO
Slide 7: Sector Trends
7 Sector Trends Electrification Agency Distribution Governance • VETS (Vehicle Emissions Trading Scheme) • Some Manufacturers have confirmed they will • FCA review into automotive finance from January 2024 not follow agency distribution route announced January 2024 • 22% of cars and 10% of vans regi
Slide 8: Consistent Group Strategy
8 Consistent Group Strategy Mission & To aim for every dealership To deliver an outstanding Vertu Motors to be the most admired Values to be the best retailer in their customer motoring experience and respected dealer group in the respective town or city through honesty and trust automotive industry
Slide 9: Growth
9 Growth Acquisitions New dealerships New Manufacturer partners Ancillary business growth • Acquisition of Exeter Honda in July • Opened new build Toyota • Opened BYD outlet in Worcester in • Retail smart repair operation started 2024, leasehold dealership, trade dealership in Ayr in September Augus
Slide 10: Digitalisation – Operational Excellence
10 Digitalisation – Operational Excellence Data Pay Later Online Service Check-in Finance Efficiency • “Vertu Insights” driving real time • Deferred payment solution for • Customer adoption of check-in • Vertu Transfer System (VTS). stock management and pricing. At service customers online for servi
Slide 11: Brand and Marketing – New Brand Strategy
11 Brand and Marketing – New Brand Strategy Moving to one brand with the rebranding of Bristol Street Motors and Macklin Motors outlets to Vertu by April 2025 Commercial Benefits • Modern ‘premium’ brand: change supported by Manufacturers • Drives simplification and optimisation of marketing spend a
Slide 12: Financial Performance
12 Financial Performance Karen Anderson CFO
Slide 13: Income Statement
13 Income Statement 6-month period ended 31 August Revenue: Record revenues delivered. £70m increase with £45m from acquisitions £’m (unless otherwise stated) 2024 2023 % Change Revenue 2,492.4 2,422.5 2.9% Gross Margin: Margins stable overall. New Gross profit 273.8 267.2 2.5% Vehicle margins weake
Slide 14: Profit Bridge – Adjusted PBT
14 Profit Bridge – Adjusted PBT Core Group Gross Profit Movement: +4.5m 7.1 1.6 0.7 (4.9) (11.2) (1.0) (0.3) 31.5 23.5 H1 FY24 Adjusted New vehicles New fleet and Used vehicles Aftersales Core Group Finance Costs Acquisitions, H1 FY25 Adjusted PBT commercial operating start-ups and PBT vehicles expe
Slide 15: Management of Cost Headwinds
15 Management of Cost Headwinds 6-month period ended 31 August Headcount Pay rate Total Salary Cost Variance change change Change £’m 2024 2023 Variance Variance % £’m £’m £’m Sales Departments 1.9 1.2 3.1 Salary cost 132.0 124.1 7.9 6.4% Aftersales 1.0 1.4 2.4 Vehicle and valeting costs 28.7 24.3 4
Slide 16: Balance Sheet
16 Balance Sheet 31 Aug 2024 29 Feb 2024 31 Aug 2023 £’m £’m £’m • Tangible net assets per share at 73.7p, up from 70.5p Intangible assets 131.0 131.0 129.6 • Freehold and long leasehold property portfolio at depreciated historic cost of £324.3m at 31 August 2024 Retirement benefit asset 3.1 2.5 3.1
Slide 17: Free Cash Flow
17 Free Cash Flow Facilities Drawn Cash Flow H1 FY25 £’m Working Capital Movement £’m Net Debt at 31 August 2024 £’m £’m Operating profit 32.9 5 year acquisition facility (from December 2022) 93.0 43.4 Increase in used car stock (21.5) Depreciation, amortisation and impairment 19.5 20 year mortgage
Slide 18: Capital Allocation Discipline
18 Capital Allocation Discipline H1 FY25 Net H1 FY25 Tangible Net 1 2 Repurchased Net Debt Gearing Capital Dividend Cash Assets Shares Expenditure Cost £245.0m £83.9m 23.1% £11.2m £5.0m £2.4m Investment in growth Return to Shareholders Acquisitions and Growth Reinvest in Operations Dividends Share B
Slide 19: Operational Performance
19 Operational Performance Robert Forrester CEO
Slide 20: Group Vehicle Sales Volume and Market Share Performance
20 Group Vehicle Sales Volume and Market Share Performance Like-for-Like Vehicle Volume year to 29 February 2024 Like-for-Like Vehicle Volume 6-month period to 31 August • Total new car market 2024: 14.8%1 lower than pre-pandemic levels FY25 Group Like-for- UK % Change 1 • Significant outperformance
Slide 21: New Vehicle Trends (Retail and Motability)
21 New Vehicle Trends (Retail and Motability) H1 H2 H1 H2 H1 H2 H1 FY2022 FY2022 FY2023 FY2023 FY2024 FY2024 FY2025 Selling price per unit [1] (£) 21,423 22,539 24,062 24,191 25,906 25,338 26,180 Gross profit per unit [1] (£) 1,688 2,205 2,105 2,246 2,170 2,019 1,965 Margin (Group) [1] 7.3% 9.5% 8.5
Slide 22: Group Used Vehicle Volumes and Margin Up
22 Group Used Vehicle Volumes and Margin Up Like-for-Like Vehicle Volume year to 29 February 2024 • Used performance saw increased volumes and margin Core Group v H1 FY24 Used • Used vehicles remain in short supply due to previous constraints in new car market (Covid, Semi-conductors, Ukraine) Selli
Slide 23: Group Aftersales Performance – Gross profit up in all major channels
23 Group Aftersales Performance – Gross profit up in all major channels (L4L) Like-for-like Accident & Service Parts Fuel Forecourt Total H1 FY25 v H1 FY24 Smart Repair 1 Revenue (£’m) 105.9 135.6 14.1 9.1 264.7 1 Revenue Change % 7.4% 7.3% 5.0% 0.1% 6.9% Gross profit (£’m) 77.3 29.1 8.6 0.8 115.8 G
Slide 24: Vertu Advantages - Our Investment Case
24 Vertu Advantages - Our Investment Case Scale & Growth Operational Excellence Financial Strength Shareholder Returns • One of 6 UK ‘Super Groups’ with • Stable, experienced management • Tangible Net Assets per share of • Progressive dividend growth excess of £4bn revenues team 73.7p • £56m dividen
Slide 25: Definitions of Key Terminology
25 Definitions of Key Terminology Core: Comparison against H1 FY2024 Dealerships that have traded for the full period of March 2023 to August 2023 and March 2024 to August 2024 Like-for-like: Dealerships that have comparable trading periods in two consecutive financial years, only the comparable per
Slide 26: Fleet and Commercial Vehicle Trends
26 Fleet and Commercial Vehicle Trends H1 H2 H1 H2 H1 H2 H1 FY2022 FY2022 FY2023 FY2023 FY2024 FY2024 FY2025 Selling price per unit (£) 23,850 24,874 24,109 25,730 27,085 28,196 29,288 Gross profit per unit (£) 878 1,046 988 1,049 1,160 1,296 1,272 Margin (Group) 4.2% 4.8% 4.7% 4.7% 5.1% 5.6% 5.2% L
Slide 27: Used Vehicle Trends
27 Used Vehicle Trends H1 H2 H1 H2 H1 H2 H1 FY2022 FY2022 FY2023 FY2023 FY2024 FY2024 FY2025 Selling price per unit (£) 16,194 19,951 19,861 20,328 21,580 20,425 20,634 Gross profit per unit (£) 1,657 1,844 1,560 1,468 1,535 1,296 1,490 Margin (Group) 10.2% 9.2% 7.9% 7.2% 7.1% 6.3% 7.2% Margin (Core
Slide 28: Vehicle Volumes Sold
28 Vehicle Volumes Sold H1 FY25 vs H1 FY24 H1 FY25 vs H1 FY24 Total units sold +/- % Like-for-like units sold +/- % 15,200 15,577 Used Trade +2.1% Used Trade +2.9% 15,522 16,034 43,204 43,921 Used Retail Used Retail +4.9% 44,868 +3.9% 46,073 13,035 +6.6% 13,413 New Fleet & Agency Car New Fleet & Age
Slide 29: Dealership Portfolio sales outlets
Dealership Portfolio 193 sales outlets Sales Outlets Vauxhall 16 Stellantis Peugeot 12 Citroen 7 BMW 9 BMW MINI 9 BMW Motorcycles 4 Ford 21 Nissan 12 Renault Nissan Renault/Dacia 9 Honda 17 Honda Honda Motorcycles 3 Volkswagen 8 SEAT/Cupra 3 Skoda 3 Volkswagen Group Ducati Motorcycles 1 Volkswagen C
Slide 30: Disclaimer
30 Disclaimer This presentation contains forward looking statements. Although the Group believes that the estimates and assumptions on which such statements are based are reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond the Group’s control. Th