Vertu's (LON:VTU) strong defensive qualities have been clearly demonstrated during H118. A falling new car market and used car margin pressures have been absorbed, yet underlying PBT has again moved ahead. While we have cut our immediate profit estimates to reflect the cautious trading climate, we believe that the continued investment in upgrading facilities and the future acquisition potential is not recognised in the current share price.
Resilient performance
Vertu has come through one of the toughest trading periods for some time in H118 with another sound trading performance. Despite a 14.7% reduction in group deliveries of new cars and margin pressures in used cars during Q2, a combination of sustained pricing discipline, sharp cost controls and lower financing costs enabled the group to deliver a 7% rise in H118 adjusted PBT to £20.9m. We remain cautious about the economy for the remainder of the year. While the used car market does appear to have stabilised, we have decided to trim our FY18 normalised PBT estimate by £0.5m to £31.5m, similar to the previous year’s figure.
To read the entire report Please click on the pdf File Below: