Vertu Motors Share Discussion Threads

[ed 123] 20/4/2016 17:51

Hi zoolook.

I took a car to a Vertu garage for a service and MoT. They didn't do the full service but still charged me for it and they failed the car on the MoT test when it should have passed (in my opinion). I paid them in full and told them not to do anything more to the car, as I was going to take the car and the fail certificate to Vosa (for an Mot appeal). When I went to collect the car they told me they had corrected the fault and gave me a pass certificate. That was counter to my instructions and meant that I was unable to make an official challenge of their 'fail' decision. I spoke to the manager about it and said I was going to write to Robert Forrester about that and about the service. He seemed completely untroubled and said I would not get a reply but he would be privately asked to sort it out. I thought he was bluffing and I sent a detailed complaint to Mr Forrester, carefully setting out all that had happened. That was about two years ago and I'm still waiting for a reply! Yes, the manager was absolutely right to say I wouldn't hear anything in reply. Following my complaint to Head Office, the manager offered to refund all the money I had paid. I told him that wouldn't be fair on his garage, as they had done some of the service work and so were entitled to part payment. However, he was insistent that he would reimburse me the full amount, and he did refund me in full.

That is why, when I read about Vertu being a good business or increasing margins or suchlike, I think back to my own experience and shake my head.

I could take the view that the manager had treated me very fairly. However, he and his staff had effectively stopped me from complaining to Vosa and (by fully reimbursing me) stopped me complaining to Trading Standards. I ask myself, "Were they being kind or clever?"

I suppose I'm unusual in checking the work done on a service and in having the knowledge and confidence to challenge an MoT decision. I don't know how widespread this sort of thing is in garages generally or in Vertu garages in particular. I suspect that most customers would accept on trust everything that was said and done.

[zoolook] 20/4/2016 14:36

>How do you suppose they are raising the margins of the businesses they buy? Do you have any experience of being a customer of theirs?

I am assuming that is a rhetorical question and you are implying some financial cleverness in the way they state their figures or short termism regardng customer service rather than economies of scale and more efficient organisation. Can you be a little clearer?

[ed 123] 20/4/2016 13:14

... once placing is completed.

The placing shares were admitted to AIM on 1 April.



The point I was making was that there appears to be a seller in size atm. Today there are plenty of shares on offer at 60.25p. Yesterday they were on offer at 61p. Someone is selling and the price is drifting down.

This is a cracking little well run company ...

How do you suppose they are raising the margins of the businesses they buy? Do you have any experience of being a customer of theirs?

[daddy2010] 20/4/2016 05:59

That was an uncrossing trade. This is a cracking little well run company in a buoyant market and Mays full years will be strong. On 11x earnings it time to fill your boots as these will be back upto late 60s early 70s once placing is completed.D

[ed 123] 19/4/2016 16:42

126k shares offered at 61p in the closing auction. Only about 1k were bought.

Placing indigestion?

If it goes through 60p, 55p next support?

No position.

[master rsi] 17/4/2016 21:12

Look at the volume last Friday and a slight bounce

[tiggertiger] 14/4/2016 17:12

Looks like something going on so I just half filled my isa allowance while shares are this low.

[miikke] 14/4/2016 14:52

Is an acquisition announcement coming soon?

[master rsi] 14/4/2016 11:55

There is a seller at the moment on the order book @ 61.50p, is shows on the trades as "AT", twice has been added on 10K size once was taken as "AT".

buys are now taking place at this low prices

[master rsi] 14/4/2016 11:44

From the "UPS" thread ........
UPS
VTU 61.375p ( 61.25 / 61.50p )
Has come down a long way and now below last month placing @ 62.50p to make acquisitions. Results next month, should show further improvement on results as the car market is growing fast. "Trading ahead of expectations with record revenues and profits". Low PE
note - The UK’s new car market grew by 5.3% in March

Indicators

[mortimer7] 06/4/2016 09:48

With the March market hitting record levels & the sector continuing in this vein, I guess that's further vindication for VTU raising £35million for their acquisition pipeline.

[mortimer7] 06/4/2016 09:12

SMMT figures out this morning for March:
The UK’s new car market grew by 5.3% in March, making it the biggest ever month since the bi-annual plate change began in 1999.
518,707 new cars were registered in March, only the third time the market has surpassed half a million units in a single month.
Growth was seen across all sales types in March: private and business registrations increased 3.8% and 15.3% respectively, while in the fleet sector demand grew 6.0%.

[cockerhoop] 04/4/2016 12:13

SMMT data for 'all important' March due at 00.01 on 6th April, so poss that?

[eggbaconandbubble] 04/4/2016 12:04

Has some news just leaked?

[hard work] 09/3/2016 22:23

"considering", "potential"...they could have used different wording if it was that close...I'm talking about the trading statement, not today's release.

[cockerhoop] 09/3/2016 21:11

What was uncertain about the RNS?

Seemed pretty clear, how much they were raising, the cost of the 3 acquisitions in the short term pipeline, the amount of additional borrowing against a portion of the freeholds.

[hard work] 09/3/2016 16:42

I actually thought the wording in the announcement was rather open to uncertainty. Wonder why they couldn't have delayed the trading update by a day to incorporate it all

[nehpets81] 09/3/2016 15:52

Perhaps not a scandal but the announcement of a placing just 24 hours after the latest update is really not good form. They clearly knew about the placing when that was released but only mentioned it as a possibility. What about the people who bought in after yesterday's announcement?

In any case, the board here clearly do not see a recession just around the corner with this amount of investment over the coming months.

[zoolook] 09/3/2016 14:53

I know it is the US but Warren Buffett has some interesting points on why he sees opportunity in dealership consolidation at the beginning of this interview:

[webclick99] 09/3/2016 14:38

I worry that the consolidation of car dealerships is not a good idea for the long term. Back in the early 2000's, estate agencies were doing the same thing. Come the recession, they couldn't offload branches quick enough and were being sold for next to nothing. Maybe estate agencies are a bad example, but that is what springs to mind.

I hope VTU has a strategy to cope with the next recession in 6 months or even 6 years, who knows, but I'm beginning to think this could be a short term investment.

[bigbertie] 09/3/2016 12:17

Ok - scandal was too strong a word, but generally the supposed rights of shareholders with regard to allotment of new shares are frequently over-ridden, in my view unfairly.

[cockerhoop] 09/3/2016 11:55

I read it as mortgaging a portion of the freeholds, they also say it will replace some of the existing banking facilities which I imagine is the £15m acquisition facility that is due to expire in Sept 16.

Edit The acquisition facility was renegotiated to £20m (extendable to £40m) after the last year end and now expires in 2019.

[ferries5] 09/3/2016 11:18

Obviously in a hurry complete the placing. All aquisitions to be completed between March And June.

Three near term acquisitions have already been identified by the Group with a combined consideration of approximately GBP26 million. Two of these planned acquisitions comprise both premium and volume dealerships and, if they complete, will augment existing franchises in key geographies and also add a new manufacturer partner. The third transaction comprises the acquisition of a freehold property and a long-leasehold property (both of which are currently occupied by the Group), and one of the two dealership acquisitions also includes a significant freehold portfolio

It is the second part of raise that concerns me more, does it mean that they are going to sell off some freehold property, or morgage it.

The Board considers that the introduction of property backed, fixed interest, long-term debt of up to GBP50 million would enhance shareholder returns, whilst maintaining the Group's strong and conservative balance sheet. This long-term debt, if executed, would replace an element of the Group's current debt facilities

[cockerhoop] 09/3/2016 10:52

On what valuation metric is VTU more highly rated than CAMB? The only one I can see is FWD PE and VTU have just said they're ahead so is out of date.

[alter ego] 09/3/2016 10:12

yes, an over reaction to call it a scandal. Company is clearly keen to move on and PI's have excellent opportunity to pick up extra shares if they want to. With respect to those who thought the share price undervalued VTU, it's the market that decides the value, not management. VTU is still more highly rated than CAMB so not that undervalued.