Vertu Motors Share Discussion Threads

[r ball] 05/4/2018 08:29

New car sales down for 1st time in 6 years by 5.7%. I suspect that the average age of cars on our roads might increase from 7.7. It's 9.3 in Germany, 11.4 in Spain and 9.0 in France. A rebalance would in effect be over a year of lost sales. Expect further market decline.

[r ball] 28/3/2018 20:35

Really quite desperate here. I reckon that vertu is one of the better run dealers but the market is weak:-Used car values underlining pcp under pressureGovt anti diesel, anti petrol, anti car?Average car ages 2-3 years better than European averageGreater reliability and less technological change means less Reason to change.Avoid. Value trap.

[woodwards26] 27/3/2018 20:12

The more I think about this the more I think this buyback of shares is crazy. The money should be invested within the company .But then again what would the share price be if it wasn't being supported by buy backs.I've followed for years since retiring from the motortrade in 2010 everything tells me this is more likely to hit high 20s rather than low 50s unless they expand their used car operation before the buybacks end.

[woodwards26] 17/3/2018 21:32

Personally I think they have massively under performed on used cars during the last 12 months .I noticed around 12 months ago they were not showing up in Auto Trader searches for used cars . So the traffic will have dropped off a lot.Autotrader is expensive but it does deliver customers if cars are listed correctly with photos , videos and a great description. Same as Right move for houses.I think someone thought we can do better and the result was a drop in used volume . In the last month I see they are using autotrader again but not as professionally as many others .

[effortless cool] 16/3/2018 19:33

Many thanks. I didn't expect it to top the used charts.

[mortimer7] 16/3/2018 19:30

E C, I've edited the post above to include Cambria as requested.

[effortless cool] 16/3/2018 12:30

M7,

Can I be cheeky and ask you to add CAMB to your analysis above?

[mortimer7] 16/3/2018 11:08

Comparing Revenue & GP data from Vertu most recent results to those issued over the last few days by Lookers & Marshalls it's easy to see Vertu matching them in terms of used cars. However Vertu have a higher proportion of Revenue/GP from New vehicles & lower from Aftersales.

Revenue mix %:......... VTU LOOK MMH CAMB
New .................. 54.2 52.7 51.2 47.9
Used ................. 37.8 36.3 38.2 43.0
Aftersales............. 8.0 11.0 10.6 9.1

With the new market dropping off, there'll be less cash requirement for stock.
VTU are performing at the required level for used cars - no point over stocking in a competitive market.
Aftersales will improve with the vehicle parc for the last 3 years record new sales & obviously is an area which has the lowest cash requirement. Therefore the "spare" cash is being allocated to buy back shares.

(The data above is for 2017 year for LOOK & MMH, 6 months to Aug 2017 for VTU & year to Aug 2017 for CAMB).

[lullabite] 16/3/2018 10:44

Imo they are buying Back stock when prices are really low their stock is so cheap And they have shown that they know how to manage capital , im holding

[alter ego] 16/3/2018 10:35

Buying more stock when demand is falling doesn't sound like a good use of spare capital to me.

[woodwards26] 16/3/2018 09:58

It demonstrates to me that they aren't concentrating on their business - car dealing .If a car dealer can't get a better return on its cash by simply dealing in cars then something has gone wrong with its core business.If I was still invested I'd be out

[mortimer7] 12/3/2018 10:02

Last friday saw the 2nd anniversary of Vertu's placing of 56 million shares at 62.5p.

Over recent months their own share buyback program has seen them acquire around 14 million shares, recently paying as low as 42 / 43p.

Not sure what this demonstrates, apart from they ain't daft!

[mortimer7] 05/3/2018 09:08

The UK new car market dipped in February, according to figures released today by the (SMMT). 80,805 new cars were registered, a 2.8% drop compared with February 2017 (83,115), in what is traditionally one of the quietest months of the year ahead of the March number plate change.
That said, it was still the 3rd highest February figure in the last 10 years behind 2016 & 2017.

[woodwards26] 20/2/2018 17:00

Why they continue to buyback shares is beyond me surely put the money into used car stock. Even at say 10 k per car and a miserable 6 stock turn and a low gross per unit of say 600 every 10k would produce 3600 and even more importantly 6 extra after sales customer that would likely spend another 3000 over the next 3 yrs . Oh and then likely come back and buy another car sometime between 2 and 4 yrs.I have not been invested for a few years but I still follow . I used to think well of their used car abilities but doubt them now.In my opinion the used car side running well is the foundation of a great return on capital employed.

[mortimer7] 13/2/2018 08:55

One of the reasons listed motor retailers will have a decent buffer in their Aftersales profits for a few years (to offset downturn in new vehicle market)....
The main determinant of the aftersales market is the number of vehicles on the road, known as the 'car parc'. The car parc in the UK has risen to over 34 million vehicles in 2017, a rise of 1.6% on the prior year.
The demand for servicing and repair activity is less impacted than other sectors by adverse economic conditions, as motor vehicles require regular maintenance and repair for safety, economy and performance reasons.
Overall, we expect at least for the next three years to see good continuing growth in the car parc, with higher growth expected in vehicles over four years of age.

[mortimer7] 05/2/2018 09:07

The UK new car market declined in the first month of the year, according to figures released today by the SMMT. 163,615 cars were driven off forecourts in January, a 6.3% fall compared with the same month in 2017 when 174,564 were registered.

[zoolook] 29/1/2018 16:02

He's looking forward to 2023

[woodwards26] 28/1/2018 22:31

I can't remember vertu at 1/4 of any recent price

[lullabite] 25/1/2018 23:06

Check out Alex bossert long thesis of Cambria

[lullabite] 25/1/2018 23:05

I hace positions un vertu And Cambria both 4 baggers in 5 years

[r ball] 25/1/2018 21:44

So why has the share price dropped?

[r ball] 25/1/2018 21:43

I don't think the share is really bothered by the fact that it's owner is a long term or a short term holder. Share buybacks can enhance mgt bonuses by increasing Eps for minimal effort. Special dividends force the business to use remaining cash wisely.

[ferries5] 25/1/2018 21:05

R Ball
Disagree about buyback policy over a special dividend,
A special dividend attracts short term holders. where a buyback ,rewards and supports long term holders

[r ball] 25/1/2018 17:17

I'm not. My only interest is: I had a holding in Vardy, it's a local company and I know a couple of employees. The market just doesn't like these companies any more. The contrast with Vardy is astounding. After all the share price hasn't moved in 3 years. Given today's profit warning the share buyback policy looks ill judged. A special dividend would have been a better way to return cash.

[mortimer7] 25/1/2018 15:07

Got Cash. Generating Cash. Very little debt. Profitable, & GP sensitivity analysis indicates headroom/cushion to cover downturn. Dividends sustainable.
So disagree with value trap.