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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Vertu Motors Plc | VTU | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 0.30 | 0.51% | 59.00 | 16:29:47 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 57.60 | 57.60 | 59.20 | 59.00 | 58.70 |
| Industry Sector |
|---|
| GENERAL RETAILERS |
| Top Posts |
|---|
Posted at 26/3/2024 08:49 by davebowler Progressive Equity Research-Vertu is the fourth largest automotive retailer in the UK, with 188 sales outlets and a track record of cross-cycle growth, principally through businesses it has acquired, funded by equity, debt and most importantly cash generation. Vertu operates across the entire vehicle lifecycle, including new and used vehicle sales, and vehicle servicing, repair and parts. Service and repair is a 40+% gross margin repeating business. With economic headwinds, the transition to electric vehicles, recent overseas investment in the UK market and noise about new business models, the next few years should be interesting. Vertu is well placed to be a winner on several fronts. ▪ Well-placed buyer and seller. Recent takeover activity has highlighted the value in the sector and, for a major international buyer, we believe that Vertu could be an attractive target. More importantly, with a strong balance sheet and proven, well-regarded management team, Vertu can continue to grow value through acquisitions of its own. We estimate that Vertu has firepower of £70m based on current net debt guidance. ▪ New and used markets stabilised. While the pandemic and its fallout led to several turbulent years, the industry has now moved into a more normal supply push driven new vehicle market, where dealers are still fundamental to the success of manufacturers. ▪ Electric vehicles (EVs). The transition to EVs will lead to adjustments across the retail market, but there is no evidence the distribution model will change from being dealership based. Volatility and changes in the market are likely to be best handled, and exploited, by the larger retailers such as Vertu that are focused on margins, returns and customer service. ▪ Clearer picture on the business model and value. Vertu is now the only motor retailer of scale listed on the LSE, following the recent takeovers of Lookers, Pendragon and Marshalls. In our view, this allows investors to focus on what Vertu is, rather than what it isn’t. As this note describes, selling cars isn’t even where Vertu makes the highest margins – aftersales service is, and that is a repeating income stream. ▪ Valuation and forecasts. The shares trade on undemanding multiples, in our view, and forecast FY24 net tangible asset value per share of 70.4p could provide significant support or even upside. We note that our forecasts do not incorporate assumptions of significant acquisitions or major capex on new dealership sites, both of which could add significantly to earnings. |
Posted at 29/1/2024 16:38 by c_k Rumours are circulating Inchcape are sounding out buyers for their UK car dealerships. Vertu are not the only option for an investor. https://news.sky.com |
Posted at 26/1/2024 15:48 by grahamburn Surprisingly negative "Avoid" recommendation in Tempus column in Times today:A few key paragraphs: Until recently, business was booming. Used cars selling for crazy money and a string of acquisitions led revenues to rocket. That, and speculation that Vertu could get taken over, like its peers, encouraged investors to jump on board and the shares to rally. Now the tables have turned. Supply shortages have gone away and the ugly side of car dealership companies is becoming apparent again. The challenges are numerous. Prices are tumbling as the market is flooded with vehicles and the economic environment and general uncertainty make consumers hesitant or unable to buy them. And operating costs are rising, partly because of an increase in wages. ................... Vertu’s valuation dipped since the profit warning but arguably not enough to reflect all the challenges faced. In a period of deep uncertainty, the shares trade at just under eight times forecast earnings, which is close to the top of their historic range. Perhaps the prospect of getting taken over is propping up the shares. The next wave of bad news could convince investors to put those thoughts aside and trigger a much more severe reaction. |
Posted at 07/12/2023 07:50 by sunshine today Those buying dealerships have been caught on the hop, (they like investors here,) noted how well the market held up over the last two plus years, and thought it was game on.All corporate action will grind to holt, as it becomes clear CHEAP , was at the end of the day, very expensive. |
Posted at 09/11/2023 10:24 by davebowler Liberum-Our Strategist Joachim Klement wrote a brief comment on the current valuations of private assets vs listed assets, highlighting just how cheap UK and European markets are in particular compared to valuations within PE funds, which has driven PE to search more actively for opportunities in the listed space. Of course, plenty of debate over which of these valuation points is most accurate but thought this was an interesting snapshot. Although not investment company specific, it does resonate given the recent buy-outs of trusts/REITs by private vehicles, who can then mark up these assets in their own portfolios. The last sentence certainly stood out to me. Kind regards, Tom Investors are increasingly moving their asset allocation toward private assets (be that private equity or private debt) at the expense of listed markets. The result is that valuations of listed markets become cheaper and cheaper, and liquidity dries up while the return prospects for private investments decline as too much money chases a limited opportunity set. The figure shows that the median EV/Sales-ratio of private equity fund holdings is now 3.1x, about 26% higher than the EV/Sales of the S&P 500 which isn’t cheap to begin with. Compare it to European and UK equity markets and investors in private equity funds buy investments at an 85% and 144% premium to listed markets in Europe and the UK, respectively. But this is the median valuation of private equity multiples. Top quartile valuations start at a 7.0x EV/Sales and top decile valuations at 16.2x! Making a decent return on such starting valuations seems extremely difficult, to say the least. No wonder then that private equity funds look for opportunities in listed markets. After all, these listed businesses are more attractively valued than private markets. The net result of all this is that investors sell listed investments to hand money to private equity funds, which then recycle that money in listed investments again, of course only after taking a hefty fee for their services. |
Posted at 05/10/2023 09:53 by daneswooddynamo The dollar strength has clearly helped the assault on the sector from the big U.S. groups but what you have to remember is that they are paying these prices for these companies thinking that they are going to make a very good ongoing return. Just shows how useless uk investors have been in valuing them. Lookers had ended up being taken over at a relatively small premium to nav, making 70- 80 million a year and being valued at 500m ( after they were happy to let it go for 450 million ) . Hopefully with vtu being the last quoted dealer group of size and probably the best managed they will extract a top price if the bidders come knocking |
Posted at 04/10/2023 08:07 by daneswooddynamo How on earth could funds have been used differently to make the company more attractive to a suitor? They are now a near 200 strong dealer group and the large overseas investors are falling over themselves to buy up scale and into the sector |
Posted at 29/9/2023 10:17 by daneswooddynamo No doubt about it but ultimately they are poorly valued by institutional investors |
Posted at 30/8/2023 09:04 by davebowler ZEUS-Vertu Motors VTU LN | General Retail | 30 August 2023 Vertu Motors is a NOMAD and Broking client of Zeus Positive trading continues Vertu has released a positive trading update ahead of its interim results for the six months to 31 August. Aided by the acquisition of Helston in December 2022, Group trading profit is above prior year levels as vehicle supply improves and costs are tightly controlled. FY24 profit is expected to be in-line with market expectations, so Zeus forecasts are unchanged, but today’s positive update increases confidence in our full year estimates. We reiterate our average valuation estimate of 108.0p per share, which provides 55.8% upside from last night’s closing price. ¨ Trading update: Vertu’s new vehicle sales continue to benefit from improving supply, with like-for-like volume growth in New Retail and Motability and its Fleet and Commercial channels. The Group also gained new car market share in the period, indicating ongoing strong execution of its conversion and customer experience objectives. Used car volumes declined 6.3% like-for-like in the five months to 31 July, partly driven by the removal of its popular 0% financing events due to rising interest rates. Used car supply remains tight (see below) and contributed to volume declines, but the Group has increased procurement of used vehicles to maximise future sales volumes. Used car gross profit per unit remains above historic, pre-pandemic levels and was comparable to the prior year. Vertu’s high-margin service and parts operations saw like-for-like revenue growth in the period, albeit still constrained by a shortage of technicians, which the Group has taken further steps to address. The accident and smart repair business, described in our January 2022 ancillary business note, continues to make good progress, delivering revenue and profit growth compared to the prior year. With the Group’s focus on efficiency and productivity, operating expenses as a percentage of revenue were slightly below the prior year, despite cost pressures in areas such as staff costs, energy, and investment in IT platforms. Interest costs increased more than anticipated due to higher stocking loans and the impact of rate rises, but strong trading performance has offset this such that Management expects FY24 results to be in line with current market expectations. As previously discussed, the Group continues to have in place derivatives to hedge part of its exposure to interest rates. Finally, we believe the ongoing share buyback indicates confidence in the strength of the Group’s balance sheet. ¨ Used car prices: The latest data from Cap HPI showed a continued normalisation of used car residual values in August, with average values of three-year-old, 60k mile cars falling 2.0% in August, equivalent to £390. Despite the fall, we continue to believe that low new car sales from 2020-22 will provide support to used car values. Indeed, Auto Trader reported there are 27% fewer sub-5-year-old-cars in the UK parc compared to 2019. Within Cap HPI’s overall measure, used electric vehicle prices fell 1.7% and now appear to be stabilising after a 44.3% cumulative decline over the last 12 months. ¨ Forecasts: In line with guidance, Zeus forecasts are unchanged today, having already upgraded FY24 PBT by 8.6% on 2 March and a further 2.1% to £48.0m on 10 May. In FY25, we forecast 4.1% revenue growth to £4.9bn and 7.1% underlying PBT growth to £51.0m as further Helston synergies are realised and the Group continues to benefit from greater efficiencies due to scale and its technology investment. Zeus forecasts do not yet include the second £3m share buyback, announced 13 June, which we estimate will have a 1-2% positive impact on EPS. ¨ Valuation: In our view, Vertu shares continue to be undervalued, trading on only 7.0x FY24 P/E and yielding 3.6%. On 27 July, Global Auto Holdings increased its offer for Lookers Plc to 130p per share, which is 9.3x Zeus FY23 forecast adjusted EPS. Applying this P/E multiple to our FY24 forecasts for Vertu gives a valuation estimate of 92.2p per share, but we estimate the Group is worth more than this. If the Lookers deal goes ahead, Vertu will be one of the few remaining public market opportunities to invest in a fully-integrated, growing motor retailer. Our average (DCF, long-run P/E, SOTP) valuation estimate is 108.0p per share, offering 55.8% upside to investors. |
Posted at 05/7/2023 07:56 by buffalobillnuts On the basis of that answer then, I think you should sell all your shares...... Why would you be invested if its not worth what other brokers or investors think it is!! Go away and de ramp somewhere else! |
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