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Building on from Vertu Motors’ H1 2024 financial results, the group announced it will rebrand and consolidate its brands under the name ‘Vertu’, retiring the Bristol Street and Macklin brands.
It’s a big move. All Vertu’s UK retail outlets will trade under the Vertu brand by the end of April 2025 as the dealer group jettisons its Bristol Street Motors and Macklin brands.
The idea is that a single UK brand will enhance marketing return on investment (ROI) and deliver cost savings. Immediate marketing efficiencies and operational benefits are expected to mitigate continued cost pressure in other areas. The group suggests upfront costs incurred will be more than offset by savings in the first 12 months of the rebranding.
Robert Forrester, CEO of Vertu Motors, and the recent winner of the Motor Trader Outstanding Achievement award for his contribution to motor retailing in the UK, said: “We will be moving away from the Bristol Street Motors and Macklin brands to a single brand across the UK – Vertu. The rebrand is important news for the group. It’s a milestone moment to move to one brand.”
Vertu’s interim results for the six months ended 31 August 2024 demonstrated a resilient H1 performance in line with expectations. Total Group revenue increased by 2.9% compared to H1 FY24.
H1 profits were lower than prior year levels as anticipated as costs increased due to cost inflation and increased headcount to drive activity. Full year profits are expected to be in line with current market expectations. Profitability in H2 is expected to improve over prior year levels due to a stronger used car market and enhanced used vehicle trade values.
Used vehicle like-for-like volume growth of 3.9% and gross margin increased to 7.3% while new retail vehicle sales volumes were down 5.9% with significant market share gains as UK market saw an 11.2% decline.
The key plate-change month of September saw like-for-like new retail sales volumes up 5.2% with the retail market down 1.8%. BEV new retail sales volumes in UK fell by 7.0%, however, Group grew retail BEV sales volumes by 10.9%. Group like-for-like retail BEV sales volumes more than doubled YoY in September against a broadly static UK market.
Forrester said: “Government incentives for retail buyers to bridge the gap on affordability of BEV cars would clearly help. It may not happen. He added that some carmakers have discounted EVs to get price parity with ICE vehicles and some have increased the price of petrol cars.
“You cannot sell BEVs in my mind without incentives from the government to reach the ZEV mandate targets in the years ahead unless you cut back on the supply of ICE cars.”
While longstanding manufacturers are investing heavily in EV technology, a wave of competition is emerging from Chinese manufacturers entering the UK.
“We are the only major western economy without significant tariffs on Chinese cars. The Chinese are likely to take some market share in the next few years, so we clearly need to be a part of that,” said Forrester.
“The UK government will not follow suit (on tariffs). Partly because I suspect they want to take advantage of cheaper Chinese EVs to help them hit their climate change targets. The only thing the EU decision does, and the American decision does, is funnel more Chinese product here.”
While Vertu runs the rule over its financial performance and the prospect of the government shifting its stance on EV incentives, in the meantime it continues to expand.
In October it acquired Burrows Motors for £12.5m, strengthening its relationship with Toyota, Mazda and Kia. Vertu’s partnership with Toyota grows from six to 11 outlets, Mazda from two to four and Kia from three to four. It is a sizeable company. Burrows Motor Company turned in pre-tax profits of £106,000 in 2023 compared to £3m the prior year on turnover of £168.9m (2022: £171.9m).
The acquisition increased Vertu’s brand presence in Yorkshire and Nottinghamshire, adding outlets in Barnsley, Doncaster, Rotherham, Sheffield, York and Worksop. All outlets will be rebranded Vertu in line in line with its recently announced rebranding strategy.
Forrester said: “We have long admired the Burrows business and are delighted to have completed this acquisition creating further scale for the Group with key Manufacturer Partners.
“The acquisition of Burrows gives us considerable scale in our partnership with Toyota and strengthens the Vertu brand in Yorkshire and Nottinghamshire. This is in line with our strategy to actively pursue value accretive growth opportunities to enhance our portfolio, applying strict investment return metrics as well as returning cash to shareholders.”
The deal includes £17.6m in respect of freehold properties and a £4m goodwill payment. Vertu as taken on Burrows debts of £10.5m OEM backed mortgage funding and used car stocking loans