Vertu Motors Share Discussion Threads

[joe say] 13/10/2016 08:40

Agreed - and not only the narrative - the figures backed up that assertion with the majority of the margin from these activities

[mortimer7] 13/10/2016 08:18

I don't think the markets & financial institutions "get" the motor retail sector.

They look at the massive revenues & low % profits compared to other sectors, and see high risk and always seem to assume negative effect of macroeconomic issues.

I actually believe the levelling off, or slight fall, in the new car market will be better for the share price As that happens, turnover will stop rising and the heightened effect of the increasing income and profit from the Aftersales business will be more evident.

It was very noticeable that VTU prioritised focus on Aftersales in their narrative with the interims on Tuesday. Rightly so, with the massive vehicle parc created by years of increasing sales.

[houxty] 13/10/2016 07:48

What is the opposite of defying gravity?

What more can they possibly do to convince a sceptical market?

www.am-online.com/news/dealer-news/2016/10/12/vertu-has-no-fear-of-brexit-as-expects-new-and-used-car-markets-to-remain-strong

[paleje] 12/10/2016 07:56

Thanks jambo, here's an unlocked version of the Zeus one, think they're all fairly positive:-

Vertu Motors PLC (LON:VTU) has reported another record performance for H1 2017 with adjusted EPS +4% ahead of our expectations. We are maintaining our FY forecasts despite softer new car sales, as we have confidence in its aftersales and used car business accounting for 72% of gross profit. The shares and indeed the sector look oversold to us, and while there could be modest earnings downside in 2017, we believe more significant EPS risk has been factored in.
H1 results: Vertu has again delivered record results for the 6 months ended 31 August, beating our expectations at the adjusted-EPS level by 4%. Revenues were 1% below our forecast albeit +18% YOY with acquisitions in the period accounting for £67.3m of the growth (5% of total). Adjusted EBIT was bang in line with our forecast and was +18% YOY with margins flat YOY at 1.4%. Interest costs were £0.5m lower than our forecast but £0.7m ahead YOY reflecting new vehicle stocking charges due to more premium sales outlets and higher new car stock levels during the period. Cash conversion (operating cash flow as a % of operating profit) was 133% vs. 222% last year. The dividend was in line and +11% YOY and is currently yielding 3% at current levels.
Key performance drivers: The performance in used cars was particularly pleasing, with aftersales also showing solid progress. Acquisitions made in 2017 made an early positive contribution, which is unusual given timing (lack of March trading) and reflects the quality of the premium businesses acquired. The acquisitions made in 2016 made a solid contribution, which again validates the success of the strategy in our view. New cars were modestly down YOY albeit this reflects a falling trend in private new car registrations since April 2016.
Forecasts: We are maintaining our headline forecasts on the back of these results and management’s near term guidance. The implied H2 PBT of £12.0m compares to £10.4m delivered last year, with a strong September performance already delivered. We are also encouraged by the ongoing strength of the servicing business, where we anticipate further progress during the coming months as the UK car parc continues to expand.
Investment view: Looking at various valuation techniques comprising measures through the cycle, we arrive at a value of 79p, which implies significant upside from current levels (71%). We assume a black cloud scenario of 6x 2017E EPS (37p per share), albeit this would be at a discount to the current freehold/long leasehold valuation of 43p per share (60p on a net assets basis). While conditions in the new car market may well get more difficult from here, we believe Vertu has put in solid foundations that will allow it to prosper through the cycle

[sphere25] 12/10/2016 06:51

The entire market cap looks to be covered by net tangible assets!

Even with the uncertainty with sterling and continued new car sales weakness, this segment only contributes 21.7% of overall gross profit i.e. a big chunk of business would hold up well in any downturn.

With no huge interest rate spike expected, folk are going to continue to lap up attractive deals imo. Capex is expected to drop off substantially too generating much greater free cash flow.

Someone should come in and bid at this valuation. I'm sure there was a note out recently citing VTU as an acquistion target.

Mr Market is being incredibly pessimistic here imo - getting alot for your money!

I'm a buyer

All imo

[ferries5] 12/10/2016 06:30

Results look ok , barring the new car sales fall.

[cockerhoop] 09/10/2016 18:39

Whilst not Vertu specific

[cornishman33] 09/10/2016 18:38

BMW, AUDi, VW, Merc. They will have no problem not selling to the Uk. It will have no impact on their sales, so they will be fully supportive of Ms Merkels stance. As long as the British are punished for defying the EU monster everybody is happy.

[paleje] 09/10/2016 16:02

Did anyone notice the shift in tone from Angela Merkel going into the weekend, she's now saying for the first time, to my knowledge anyway, that the mighty German car industry won't get its own way over brexit there's more at stake. So have we got more to worry about than purely fx, what proportion of our sales are EU imports, anyone?

I believe 70% Of profit is used cars and after sales so how much of the 30% is EU.

of course it could be bluster at this stage but the uncertainty factor will weigh, it will be good if BOD can manage some guidance this week.

EDIT sorry just amended 70% to profit not revenue, my bad notes.

[ksharlandjiev] 07/10/2016 07:19

Zeus Capital – UK Motor retail sector / SMMT September 2016 dataPosted by: giles.arbor 5th October 2016Zeus Capital to noted that the SMMT (Society of Motor Manufacturers and Traders) has released new car registration data for the key trading period of September this morning. Headline numbers are +2% YOY. Private registrations were -2% within this number continuing the downward trend we have seen in this data since April. Fleet was 7% showing the excess capacity we continue to see in the market, and we believe self-registrations would have been a well-used tactic to arrive at these numbers. That said, we believe this outcome should secure a solid outcome for the UK dealers for 2016, albeit with increasing uncertainty going into 2017.SMMT data: Data for the key period of September (typically >15% of annual registrations) has been released this morning. New car registrations were +2% vs. a very strong period last year, and marks the highest September on record with the market YTD +2.6%. This is only the second time that the 2m mark has been passed in September since 2004. We view this as a good outcome for the industry, and should secure a good 2016 outcome for most PLC dealer groups. However, We note that private registrations have been negative on a monthly basis since April, and this performance also reflects orders generated many months in advance in some cases.Mix issues: Within the mix, private registrations were -1.7% with fleet +7.3% and business -14.9% (small volume at 23,008 vs. total registrations of 469,696). Brand performances of note include BMW +10%, Mercedes +16%, Honda +7%, Audi +9%, Land Rover +49% (volume driven by model changes albeit with some pressure on margin) and Jaguar +33%. Elsewhere VW was -14%, Vauxhall was -5% and Ford was -11% as the volume sector continues to underperform, albeit in some cases this can relate to the product cycle.Outlook: We believe this is a good outcome, and this should ensure the 2016 market ends up above 2.6m albeit with the aid of self-registrations. Looking into 2017 the picture is less clear, and we note the SMMT has recently cut its 2017 by 6% to 2.5m registrations. In a historic context this remains a good outcome, however, we think it is sensible to assume the market falls back from here. Weaker sterling relative to the Euro and Japanese Yen may dictate OEM behavior going into 2017 particularly as hedging strategies start to come away in Q1 2017. A softer new car market is not necessarily a negative in our view, and might help residual values and therefore used car margins over time.Next scheduled news flow: Vertu Motors Plc (LON:VTU) H1 results 12 October, Inchcape Plc (LON:INCH) Q3 IMS 27th October, Cambria Automobiles Plc (LON:CAMB) FY results 22 November. hxxp://www.directorstalkinterviews.com/zeus-capital-uk-motor-retail-sector-smmt-september-2016-data/412712038

[mortimer7] 05/10/2016 09:50

There was a welcome boost for the UK motor sector this morning, and in the wider context the UK economy, (brexit concerns etc) as the SMMT published their figures for new car registrations for the month of September - the second largest month for the industry with the new plate change.
The highest ever number of units for a September were recorded, 469,696 being 1.6% over September 2015. YTD figures for 2016 are now 2.6% ahead of 2015.

Hopefully this performance is reflected by VTU when they announce their half year results next Wednesday (12th).

[bigdazzler] 05/10/2016 09:49

I have a fair bit of money in this stock and it is the stock that causes me most concern.

[mortimer7] 04/10/2016 10:09

Over the last 3 years VTU share price has always gone on a little rally in Q4 after the results. (albeit without the macroeconomics bearing quite the same influence as now).
Fingers crossed this year for the same, especially as it's starting from a low base.

[polecat70] 28/9/2016 19:25

It's slowly catch a monkey with this stock I'm afraid, but good news is when their low just pile more money in because it's only a matter of time till you get the return!

[daddy2010] 28/9/2016 05:22

I share your pain!

[tiggertiger] 27/9/2016 19:47

Quote " next 5 minutes"! I have ploughed more and more into this share over 3 years and it's easily the worst performing share in my portfolio ???

[daddy2010] 26/9/2016 23:21

Make that earnings are out on the 12 October (don't you just hate predictive Text!!!)

[daddy2010] 26/9/2016 23:20

Yes teachings are out on 12 October.With the current valuation (46.5p) underpinned by 40p in property backing & cash there is a big margin of safety here. Throw in 6.2p of growing earning, a high quality management team and a pension scheme in credit, all we need is the positive confirmation that further expansion will NOT be funded by more equity raises (the cities fear I believe) and these should motor back to 60p+ in no time imho.A p/e of 6.2x for next year is just plain silly for a company that also has nearly £100m in banking facilities it could deploy if it wants too / needs to if we move into recession.An expanding annuity income of £22m+ from the high margin aftersales business also provides a lot of free cash flow to finance Capex to refurbish dealerships (increasingly being demanded by the manufacturers which is why the smaller independents are in trouble allowing vertu to snap them up on the cheap) also sets them aside from the weaker players. These strong and trusted relationships with the larger OEMs (Ford, Jaguar etc) is what had allowed Vertu to continually deliver above average sector growth in a very competitive and low margin business and this intangible goodwill is not easy to build and should not be underestimated.If management can continue to deliver and expand the group margin (currently 1.2%) from a low standing start at a young and growing business by executing it's strategy (buying underperforming dealerships from distressed sellers/retiring owners, turns them around through refurbishment / implementing new it systems and vertus slicker sales processes) then there is no reason why margins and earnings cannot double from here (Pendragon & Inchcapes margins are 2.1 and 4.2% respectively albeit from slightly different business mixes). This is how Liberum derive their very achievable price target of 100p so you can seen the potential here.Need I go on.........This will take time of course but all good thinks come to those that wait unfortunately most shareholders want everything in the next 5 minutes these days?D

[polecat70] 26/9/2016 20:34

The second half results to be announced at the city next month and a record profit should hopefully boost the very under valued share price

[bolador] 22/9/2016 11:13

KPWF,
Yes it looks as if they have shot themselves in the foot with their smart equity issue.The management should realise they are paddling like worried ducks and staying in the same place, significant holders might have to have a word.

[babysanj] 21/9/2016 16:12

there is a massive buy this afternoon fro £94k. this is bottom now. Financial should be strong. back to 60p anybody?

[zoolook] 21/9/2016 09:14

In reply to bigbertie:

That discount didn't last for very long though!