Vertu Motors Share Discussion Threads

[seball] 07/7/2016 16:04

Yes I agree Ed. I'm happy to buy more at this price as recent placing was at 62p. Vertu is undervalued and has a good dividend yield imo

[ed 123] 07/7/2016 15:50

Seball.

Your spring is still coiled. ;-)

11 million traded now. That's more than 3% of the shares issued. Guess there are two institutions active, one selling and one buying. They seem to be more or less agreed on price, so maybe there will be a big volume closing auction?

Took a gamble and bought some today. Have to say, I'm not a fan but it does look cheap atm. The question is, 'How long and deep will any downturn run?' Anyway, I'm hoping the balance sheet and resilience in earnings from after sales will see it through.

[seball] 07/7/2016 11:00

This is like a coiled spring.

[ed 123] 07/7/2016 10:50

Brief blip up but then the 38p seller returned.

Volume of 2 million shares traded by 10:45am.

AGM on 20 July 2016. Anyone going?

[daddy2010] 06/7/2016 21:21

Obviously he has not. Absolutely no chance of a cash flow crisis as they still have approximately £10m cash left on the balance sheet and that's after the Gordon Lamb purchase and £50m Capex pencilled in for for 2017 and 2018. Add in the headroom on the overdraft and other banking facilities (nearly £80m) and prudent approach to valuing assets on the balance sheet (particularly property and stock - unlike others in the sector) and Vertu are well placed to whether and take advantage of the anticipated slowdown across the sector.

The market has already priced in a 30%+ decline, whereas 10-15% may be closer to the mark if your bearish. Although we saw a small downward tick in new car sales for June (not surprising given previous record levels) competitors cambria and lookers both reported strong trading updates this morning.

Buy when there's blood on the forecourts as these will be much higher once sentiment improves, placing indigestion subsides and willing buyers return to the market.

The Agm statement later this month could also help turn sentiment here.

With a pe of only 6x, book value of 0.4x, roce of 12%+ and a positive free cash flow profile, there is an awful lot of bad news already priced into this efficient and we'll run business imho

D

[ddz6006] 06/7/2016 20:35

Have you read the numbers???

[my retirement fund] 06/7/2016 10:33

This is a company thats gleefully galavanted round the shop buying up dealership after dealership right at the top of the market out of money it doesn't have and has ponced of shareholders instead. Now we are entering a inflation driven full blown recession and unemployment is set to return not only does this look overpriced, it could even find its unable to manage its portfolio during this down turn run into a cash flow crises and go BUST !

[mortimer7] 06/7/2016 10:04

SMMT figures for June 2016 have been issued this morning showing 255,766 new cars were registered for June, completing the highest ever first 6 months total in 2016 of 1,420,636.
In isolation, June is only 0.8% down on June 2015. Chief Exec of SMMT commented
"It is far too soon to determine whether the referendum result has had an impact on the new car market. The first six months saw strong demand at record levels but the market undoubtedly cooled over the second quarter. It’s important government takes every measure to restore business and economic confidence to avoid the market contracting in the coming months."

IMO, it's fairly obvious the new car numbers will begin to recede at least in the short term, but there is a massive bank of aftersales business built up to sustain dealers. And even though Junes numbers of 255,766 are slightly down on 2015, to put in context, June 2014 was 228,291.

[spooky] 06/7/2016 09:46

But we ARE going into one IMO.

[seball] 06/7/2016 09:39

Agree. We also have the prospect of another interest rate cut putting more money in consumers pockets. This is trading like we are in a recession? We are NOT.

[red_shed2000] 06/7/2016 09:32

Well it's an argument but I'm not sure I buy it....

The pound euro exchange rate was at the level it is today during 2010, 2011, some of 2012, 2013 and part of 2014 and throughout all of those years new car sales continued growth yoy. Now I appreciate it was from a low baseline due to the financial crises but still, this is what happened.

Car manufacturers aren't going to want to see sales drop so I would also expect lower prices to compensate if they see that as a threat.

AIMHO

Good luck all.

[hybrasil] 06/7/2016 08:34

You are all missing the point.


The sterling euro rate means a jump in car prices that Joe public wont be able for.

[daddy2010] 05/7/2016 17:41

I agree several but it's hard to fight the market when it's in this mood. Saw my paper loss on this rise another 6k today.Tomorrow's another dayD

[seball] 05/7/2016 16:31

Looks like weak holder selling out. Great opportunity here as it's a great business with fantastic management. Once done this will rise strongly. Strong Buy at these levels imo.

[darnoc64] 05/7/2016 16:19

What the hell is going on here! This is ridiculous!!

[seball] 05/7/2016 15:39

Under 40p to Buy. I'm following directors and buying. Strong Buy imo

[daddy2010] 02/7/2016 21:16

Lookers nim is around 2.4% but a very different business. Much more reliant on car sales rather than more profitable aftermarket. Their price to book value is also around 1.4. Vertus is 0.7!!

[essentialinvestor] 02/7/2016 11:42

Ed, would you happen to know the Lookers comparative margins?, TIA.

[daddy2010] 02/7/2016 09:39

Thanks Ed. we all need a little luck

[coolen] 01/7/2016 22:45

Recent slide may be linked to Miton having to trim their open-ended fund after the high-profile managers were both head-hunted last month.

[ed 123] 01/7/2016 19:11

Good luck, D. :-)

[daddy2010] 01/7/2016 17:50

Yes Ed. Well aware of the margin and it's discount relative to inchcape and Pendragon et al but that is exactly the point. This is a franchise turnaround margin expansion story and I have every faith that the management will deliver. If Vertu traded at a normalised sector margin or even doubled the margin to say 2% as the benefits of longer term service contracts and franchise efficiencies filter through to the business they will be a lot higher than 42pThis is sell side case behind Liberum target price of 100p. I suspect given the short term uncertainty and euro movements the truth will be somewhere in the middle.D

[zoolook] 01/7/2016 17:26

Bought more today. Now my largest holding. Massive asset backing, Director buying and even the very well covered dividend gives a reasonable yield now.

[ed 123] 01/7/2016 17:14

Hmmm .... I'd be careful.

In Vertu's last year accounts its pre-tax profit margin was only 1.07%.

If the car sales/servicing market hits a downturn and margins are squeezed by the competition, other listed car dealers (eg. Inchcape with its pre-tax margin of 3.8%) will be less impacted.