Vertu Motors Share Discussion Threads

[karadas09] 05/1/2018 21:10

@ r_ball My holding in VTU is all part of a balanced portfolio of stocks which includes banks and non UK companies. My only other UK consumer facing share is DC. which I picked up at recent lows.

[r ball] 05/1/2018 20:06

I disagree. The risks are too great. I would avoid any exposure to consumer in the U.K. the banks are looking good value though....

[karadas09] 05/1/2018 16:39

@lullabite. I have been on board here since the low 40's last year. Clearly the current market conditions show a reverse for car sales, so the share price is going to be kept under pressure for a few months at least. However, Vertu have been consistently increasing their market share since 2006 and specialise in buying up distressed dealerships and turning them round. They have demonstrated a track record in extracting good value from these deals for shareholders, and challenging market conditions might present more of these opportunities. The management team are strong and have invested in analytics tech that puts them ahead of some old school competitors. Vertu also make the highest profit margin in after sales which gives them a significant hedge against falling new car sales. The longer term picture over 10-20 years regarding electric vehicles (which require less maintenance) and different ownership models does create some uncertainty for me, but I don't see this as an immediate threat. I think trading below book value and with a decent divi, this should be a good 3-5 year hold and then see what the future holds.

[r ball] 05/1/2018 10:48

The market has changed a lot since the Vardy days.

[grahamburn] 05/1/2018 10:38

Don't quite get your connection, lullabite, as I'd hardly call the rangebound share price "interesting"! IMO, unlike its immediate competitors, Vertu has much more potential upside (and, therefore, less downside) risk due to its business model. Its strength in used cars and aftersales policies does provide a degree of protection in the inevitable downturn.

[lullabite] 05/1/2018 10:13

Vertu is getting interesting , share price hasnt moved in months cause brexit fears

[mortimer7] 05/1/2018 09:12

152,473 New cars were registered in the UK for December 2017 as per SMMT figures issued today. This is down 14.4% on December 2016. Full year total regns for 2017 are 2,540,617 compared to 2016 total of 2,692,786 a decline of 5.7% year on year.

[r ball] 05/1/2018 09:07

Avoid. Declining sales and falling residuals willImpact on PCP deals. Possibility of missellling investigation too. The share price has done nothing for a few years.

[lullabite] 28/12/2017 03:25

Also i would like to know , my main concern about this industry is that in if case of a downturn ,are theygonna be able to achieve higher results than before the downturn in a 4 years time period? My Bull thesis is that vertu has a solid balance And he can use the downturn to buy bargains (other autodealers Will be distressed) Also Aftersales And used vehicles are more Stable than new vehicles in a downturn But my bear thesis is that pendragon took like 9 years to achieve higher EPS than he has before the downturn (they had higher debt but still is alarming) lookers Also took way too long to achieve higher earnings per share than It has before the downturn back in 2007 cause they had to issue new shares So the main issue here is if theres a downturn incoming are theygonna be able to achieve higher EPS than before the downturn in a 4 years period time? If so vertu is a great long term investmentWhat are your thoughts on this? Do you guys think that their healthy balance would help them offset the downturn effects?

[lullabite] 26/12/2017 11:56

I just discovered Cambria cause i was looking vertu motors And i came across with Cambria , i though operating margins were higher in lookers or pendragon cause of econimies of scale but Cambria has higher margins than vertu with lower sales , do you know why? I Also think vertu is a great investment , both management teams are great And both companies have net cash position , kinda hard to pick one

[ferries5] 21/12/2017 13:22

htTp://www.bbc.co.uk/news/business-42432516 UK car production driven down by fall in domestic demand Once the diesel questions are answered There will be a pent-up demand in the future. Cars are not built to last

[grahamburn] 05/12/2017 13:09

Will Vertu be considering picking up some of the showrooms being offloaded by Pendragon?

[mortimer7] 05/12/2017 09:09

New Car registration figures for November 2017 out this morning. Down 11.2% compared to last November to 163,541 units. 30.6% drop in diesel registrations following months of confusion and speculation about the government’s air quality plans and its policies towards diesel cars.

[mortimer7] 06/11/2017 09:15

SMMT figures out today for October UK New car Registrations. Down 12% compared to October 2016, citing low consumer confidence & lack of clarity in government policy on diesels as significant factors.

[essentialinvestor] 24/10/2017 09:24

Would tend to agree with Ed, net cash gives some support should trading conditions get tougher- which looks more likely than not. The sector is highly cyclical as we are aware. The rudimentary rule on cyclicals is usually to buy on higher multiples (large earnings declines) and sell on low multiples (sharp earnings recoveries). Big generalisation in the above admittedly.

[ed 123] 24/10/2017 07:58

MRF. "The simple fact that they have gone on one enormous buying binge right at the very peak of the cycle." Vertu has been raising cash at intervals since its admission to AIM in 2007. See below. Placing in March 2016 raised £35 million at 62.5p per share. Placing in May 2013 raised £50 million at 38p per share. Placing in June 2009 raised £30 million at 30p per share. Placing in March 2007 raised £26 million at 75p per share. It used most of these funds to buy businesses, some of which at times of distress in the industry. Peak cycle buying? Relatively little. At 31 August this year Vertu had £20 million net cash. They have shied away from risk of spending up all their cash, as this is a cyclical sector. Others in the sector have less strong balance sheets. What I don't like is Vertu spending shareholder funds on share buybacks. That money could be useful in the not too distant. Also, there is the sector-wide risk of what Brexit might bring, on top of the current slowdown. I've held Vertu in the past but have been out for some time. Watching.

[my retirement fund] 23/10/2017 21:55

The simple fact that they have gone on one enormous buying binge right at the very peak of the cycle.As the music slows down inevitably the piper will have to be paid.It possible shareholders will support them and pay the piper though. If they do that means eyewatering dilution.

[ed 123] 23/10/2017 20:25

Agree that share buybacks obviously help those who want to, to exit. However, talk of possible insolvency further out??? What combination of events do you think might precipitate insolvency here?

[my retirement fund] 23/10/2017 16:16

I bet a few people were feeling the gods were smiling on them today by allowing them to exit without being totally mauled.I suppose the question is for Vertu is that without sharholderers support how long can it weather the storm before insolvency comes a knocking?

[britstox] 20/10/2017 15:57

Just bought in. Thoughts on this share? I remember reading a while back there's a bit in the pipeline over this next year.

[eggbaconandbubble] 16/10/2017 16:37

Daimler recalls 400,000 Mercs going back to 2011 models!! Minor adjustment to airbag settings. No one injured since "faulty" product first installed 6 years ago. A good ruse to get punters back to the showroom and whilst they wait one hour for the fix a quick test drive in the latest model that will only set you back x hundred quid a month on the strap. Or am I being a cynic?

[cockerhoop] 11/10/2017 12:50

Ferries5, I agree very interesting points made on Connected and Electric Vehicles along with their unique online offering. Also fascinating references to competitors pre-registration tactics and the treatment of vehicle funding. Clearly waiting (15 months with no acq) for a bit more distress before picking up further dealers.

[eggbaconandbubble] 11/10/2017 10:54

All the eloquence of a used car salesman!

[ferries5] 11/10/2017 09:33

A very polished and professional presentation, money in the bank and a pension surplus, plus a management team thinking, well ahead.

[mortimer7] 11/10/2017 09:25

This mornings commentary on the interim results by CEO... hXXps://www.brrmedia.co.uk/broadcasts/59dcfe9fcb88740a8d8ff40d/vertu-motors-interim-results