Vertu Motors Share Discussion Threads

[clive7878] 27/11/2022 22:13

sunshine Today - How depressing -
One has to over come the challenges in life,
i would enjoy the football while you are still alive.

[essentialinvestor] 27/11/2022 13:46

Bought a small amount on Friday.

[sunshine today] 27/11/2022 07:52

£60,000 a year is 42,900 after tax and NI.

Then knock off pension of £1,900

Then knock off average commute to work £5,000

Then knock off child care , a minimum of £5,000.

You have now seen half your income GONE.

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Then knock off utilities

Then knock off food

Then knock off the poll tax

Then knock off the mortgage.

Then knock off the mobile phone

Then knock off house maintenance

Then knock off the car loan

Then knock off the personal loan

Then knock off car, house, life, insurance.

Then knock off dentist, hair, and prescriptions.

Weddings, deaths,

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Absolutely nothing left for luxuries.

However is far worse than that because £60,000 is TWICE the average U.K. wage.

[clive7878] 26/11/2022 19:04

The current inflation rate, vastly increased mortgage rates and energy prices,
may well hurt a lot of people in the coming months, but if a public offering
came on the market at 80% of its market value, one would see that a large number of people have substantial funds to buy non-essential large priced items including cars.
Some of the professions advertise starting salaries of £28,000 pa. Tube drivers are said to be earning £60k. Deliveroo & takeaways are still doing very good business even though many people are said to be hard up.

[greyingsurfer] 26/11/2022 10:19

People will always need food along with cars

If I had to make the choice I'd go for food!

I know a mad Frenchman once ate a whole car (after grinding it up) but they're not very nutritious.

[clive7878] 25/11/2022 21:53

People will always need food along with cars - a status symbol in many cases - to get around. Just depends how much they are prepared to spend on motor and when they decide to change.
There is still confidence in VTU as the share price is steady at around 47p, as they realise that it is still lowly rated with good prospects having good solid management
My first share was British Car Auctions, then Burddene Caravans, both did well, that was a long time ago.

[sunshine today] 25/11/2022 07:50

That just about sums it up.

A recession / depression just might change the mindset of millions.

[sunshine today] 25/11/2022 07:49

FT - 24/11/22:

Stuart Masson, a former car dealer who now runs the website The Car Expert, believes many drivers are regretting “going large” on expensive PCP deals.

“The car industry is utterly reliant on people buying cars they don’t need with money they don’t have,” he says

[microscope] 24/11/2022 15:31

Very interesting TT, thanks again. VTU did say that discussions were well advanced so hopefully not too long to wait.

[tomtrudgian] 24/11/2022 14:00

Thanks, a few other points:
1/ Helston has been a successful private family dealership for many decades. Unlike listed companies, the owners will inevitably have been producing accounts to lessen tax rather than enhance declared profits, to the extent legally allowable.
2/ The aged owner and his wife died separately about a year ago. Employee motivation, proactive management and trading improvements may have suffered since then.
3/ Dealerships get sales volume (not profit) incentives from the manufacturers. Most employees get commission on sales volume too. Again, not on deal profitability. That can never be known to management at the time as the part exchange sale price, the stocking cost where the part exchange depreciates without being sold, the warranty repairs required on both sold and part exchanged vehicles, whether there will be a default on the credit given, etc can only be a guess. I found it pragmatically impossible to give no commission to employees on deals I thought might make a loss. Overtrading is always difficult for management to avoid.
4/ When negotiating we all know one should always focus on what the other party wants, and adjust our offer terms to suit. In this case Vertu are almost entirely negotiating with the trustees, acting for probably dozens of beneficiaries including great grand-children who may have little input. It is inevitable, but perhaps illogical, that both the trustees and the beneficiaries will focus not on the highest price but on reducing both inheritance and capital gains tax. Some will emotionally prefer Vertu shares so they keep a stake in Helston, others cash.
5/ The 8% loan should obviously be repaid, which will enhance the deal profitably. Also one of the freehold dealerships is owned by the Carr’s estate, who get rent from Helston. I hope that Vertu can buy the entire lot, with simultaneous contracts to sell on unrequired parts to the two other interested parties. Otherwise the matter is even more complicated and will take a long time to complete.

[microscope] 24/11/2022 09:46

Thank you Trudgian. I always find it really rather humbling when someone with such in depth knowledge of a particular business, such as yourself, spares some of their valuable time to enlighten us on the inner machinations of a company's and/or sector's workings.A valuable and very worthwhile insight that is all too rare on these boards, and a clear picture presented on how VTU can first negotiate, and then make a success, of the proposed acquisition.Much appreciated.

[trudgian] 23/11/2022 19:18

Some 45 years ago as a newly qualified accountant, I bought into a small private unlisted VW/Audi dealership equally with the two founding directors, so we then had one third of the shares each. The shares were cheap as the existing directors were grossly over-trading, over-borrowing, and so making negligible sales margins. I changed that. A long time ago now but what is not out of date is that buyers care more about vehicle colour and monthly payments, than what the actual APR or annual depreciation is. Margins are king.

Vertu's policy is wholly different. Tightly run for profit and never sales volume. Now expanding very fast but prudently with Freeholds and negligible debt. So they can expand with cheap mortgages, not overdrafts. Not much debt may be needed as otherwise why continue the share buyback?

Look at Helston's accounts (free at companies house web site). With 44 dealerships, bodyshops etc it is very large for an unlisted company. Uniquely unusual in fact as almost the entire shareholding is the name of trustees for the descendants of the founders Mr and Mrs Carr (who died very recently, hence the sale). Further there is a huge £7.75 million loan to the Carr's estate at an astonishing 8%, yet Helston still make a profit!
Superb opportunity for Vertu to negotiate cleverly with the descendants.

[clive7878] 17/11/2022 22:54

With the James Hunt optimistic forecast of inflation over next year and interest rates over the next 3 years after todays mini budget I would have thought that the market would have been quite pleased, despite the 1% higher inflation rate announced recently to 11.1%, although the market hss slid back a bit over the pasted few days.

[effortless cool] 11/11/2022 16:01

clive, I definitely don't want a rights issue when the share price is below NTA p/s.

[clive7878] 11/11/2022 15:40

As I understand Helston is going to be sold to 3 concerns - vtu taking the lions share. It depends on which dealerships vtu decide to go for, & how vtu can get the best out of what they buy in respect of saving costs to achieveachieve still a low pe ratio.May be a rights issue may be better than taking on debt.

[wad collector] 11/11/2022 09:10

Microscope , you ask my point when I questioned the price of the deal. That is the whole point, how can you celebrate it before you know the price? Granted, they have acquired wisely in the past , but that does not guarantee that this is good news. And the market has not exactly celebrated it either. Yet.

[dennisbergkamp] 10/11/2022 22:50

Would it be a possible t/o target? Second hand prices are crazy! Any thoughts on how close the chip shortage resolution is?

Ta,
D

[clive7878] 10/11/2022 21:59

Vtu will find it difficult to aquire something else also on a pe of 5, which could be a drawback

[microscope] 10/11/2022 21:08

This isn't your typical bolt-on acquisition, it should be transformational.

[woodwards26] 10/11/2022 18:43

-Of course pretty decent dividends along the way And more recently share buy backs happening to reduce total shares in issueMaybe the long term shareholders apart from the 49 p cost per share can look forward to a market repricing if the market agrees with asset value but I think the market is pricing it just right.Hopefully someone else proves me wrong with a bid well above 49p.To me it's just been savvy accountant based thinking and issuing of shares rather than savvy motor trade management.We will need savvy management certainly over the next few months with used car values now retreating and both good staff and customers harder to find and retain.

[woodwards26] 10/11/2022 18:32

I'm still waiting for that savvy bit to be provedMy simplistic view is and I'd love someone to point out if I have any basic error in my logic -It cost 60 p a share at initial offering with a core aim to build a group by acquisition which has happened and continues to happen.Various times new shares have been issued to fund the core aim but only once has a placing taken place where a shareholder was able to participate . I think this was in 2013 and it about doubled the shareholding at 38 p a share and was fully subscribed.So a private shareholder has bought shares at 60p and 38p which by coincidence averages 49p a share about the same as todays price so not that good an investment to me to call them savvy management .Of course pretty decent dividends along the way

[clive7878] 10/11/2022 17:15

Believe that past record shows VTU has some savvy management and that any future deals should prove to be beneficial. Savings may be able to be made on streamlining the business.

[microscope] 10/11/2022 15:06

So, what's your point, Wad?

Lots of good ones in history, lots of bad ones. As GB rightly points out in VTU's case good ones.

And the point about paying the right amount, already fully covered by other posters.