Vertu Motors Share Discussion Threads

[mortimer7] 06/1/2021 09:18

This morning the SMMT has published the numbers for UK new car registrations for December. Total registrations were 132,682, a reduction of 10.9% on Dec '19 total of 148,997.
Total figure for 2020 is 1,631,064 vs 2,311,140 last year.

SMMT revised their 2020 forecast in July this year to 1,603,000, so H2 has turned out just slightly better than expected.

SMMT Commentary "with the rollout of vaccines and clarity over our new relationship with the EU, we must make 2021 a year of recovery. With manufacturers bringing record numbers of electrified vehicles to market over the coming months, we will work with government to encourage drivers to make the switch, while promoting investment in our globally-renowned manufacturing base – recharging the market, industry and economy".

[viking24] 18/12/2020 17:16

Like to see the buy prints

[gipps] 16/12/2020 19:02

Massive volume today any thoughts ?

[sphere25] 16/12/2020 14:16

Some big chunks just gone through here, two lots of 6.8m which makes the volume the largest since 2015.

Interesting exchanges ahead of a key period. Alot of yeah but no but yeah but no going on with a "narrow path in view" for a trade deal. Not just any old conventional path, a narrow one....a narrow one which also appears to be in view.

All nice and clear then.

[essentialinvestor] 09/12/2020 19:09

Thanks, unsurprising.

Big few days in prospect with EU talks concluding.

[viking24] 09/12/2020 16:22

Numis buy note on the sector, Vertu top pick

[davebowler] 07/12/2020 17:20

Zeus;
Vertu has announced an acquisition that gives it a significant BMW and Mini presence in Yorkshire and the North East. We see this as an asset rich transaction with minimal goodwill, albeit it will take time to turn this business around financially. That said, we believe this transaction comes at an exciting time, given the brands strong pipeline of electric vehicles, and this also shows Vertu investing for the long term as a key industry consolidator.

§ Acquisition: Vertu has acquired a significant BMW and Mini market area in Yorkshire and the North East from Inchcape. This consists of 12 sales outlets, in five locations namely York, Sunderland, Teesside, Durham and Malton. In addition, there is a BMW Motorrad motorcycle operation in Sunderland and an additional used car operation in York.

§ Financing: The total consideration amounts to £18.7m (subject to a completion accounts finalisation) together with the assumption of manufacturer used vehicle stocking finance of £8.9m. The assets acquired in respect of freehold/long leasehold properties amount to £16m The acquisition has been funded with a combination of cash and a £12.8m 20-year mortgage facility from BMW Financial Services at a fixed interest rate of 2.9% for the first 5 years, another sign of strong OEM support for this transaction. The acquisition includes a payment in respect of goodwill of £0.75m, which highlights the value of this asset rich transaction and appears to be substantially less than transactions undertaken in recent years.

§ Impact on forecasts: Due to the timing of the purchase and the historic trading performance of the sites acquired, we anticipate this transaction will reduce 2021E adjusted PBT by £3.0m and will also be earnings dilutive in 2022E, generating a positive impact on profit in 2023E. We ultimately believe the business acquired is capable of delivering annual EBITDA of £5.8m and even on a conservative EV of £35m assuming additional stock investment, equates to 6x.

§ Trading update: The Group’s strong trading momentum continued into November. While this is good news, we believe it remains sensible to exercise some caution for the remaining quarter of FY21 given the clear uncertainties still ahead (Brexit, COVID cases rising post relaxation of rules, rising unemployment etc). Indeed, it is worth noting that new car registrations were -27% during November according to the SMMT, albeit this showed a considerable improvement vs. April and May showing how well the industry has adapted to national lockdowns. We believe the impact of stronger trading offsets the anticipated dilution from this transaction.

§ Investment view: We believe the long-term valuation of Vertu is compelling and have not modelled in the full potential of this transaction into our long-term forecasts. We see a conservative average valuation of 65p per share, which implies significant upside from the current share price.

[essentialinvestor] 07/12/2020 12:24

Trading continues in line and at last the long talked about acquisition.

[gipps] 06/12/2020 11:31

Has it been announced how much they paid ?

[gutterhead] 06/12/2020 11:21

It was announced on 15th October, already priced in.

[jaf111] 05/12/2020 17:47

Definitely an interesting play on Brexit....could certainly see the shares falling to, if not below, the 24-26p range if we get a ‘no deal’....and I would then be a buyer too.

[essentialinvestor] 05/12/2020 17:00

Why?, firstly a very small buy, 26 pence type area may be a better entry point -
providing trading develops in line.

When buying or selling a stock I will do this in stages rather than
attempting to catch an optimal buy or sell point.

And lastly, because I don't have any certainty on furture price direction.

It is worth saying that if we fail to secure an EU exit deal,
it arguably makes it tougher going for Vertu on the new car side,
IF there are tarrifs imposed.

[grahamburn] 04/12/2020 15:08

EI.... so on your reasoned prediction why make a purchase at the price you did?

[essentialinvestor] 04/12/2020 15:04

Added a small amount under 28, share price had ahead of itself
touching 33 recently.

24-26, if available looks a decent entry point - on the proviso trading
continues to develop inline.

[gutterhead] 04/12/2020 11:17

I think there are some mergers very close to happening.....marshalls and vertu do figure in that.
I could see Inchcape exiting auto retail, they are slowly selling and make more money in other parts of their empire, maybe Jardine also.
its a very interesting time.

[mortimer7] 04/12/2020 10:42

I think the current economic situation for the motor sector will throw up all sorts of cherry picking opps for the smarter upwardly mobile operators such as Vertu/Marshalls.
Probably come to fruition once there's more clarity on Brexit & the Pandemic.
They'll need to strategise for 2030 impact & wouldn't be surprised to see some mergers or consolidation at the top end of the sector for the larger groups.

[essentialinvestor] 04/12/2020 10:23

Slight concern on cyclicals atm is price action is behaving as

we are about to revert back to a pre pandemic economy, without a pause for breath.

That's not going to happen overnight.

In tetms of VTU, you could may a case that the strongest may grow

even stronger.

[gutterhead] 04/12/2020 10:17

that's the feedback I am getting....pent up demand pushed Q3 and its eased since then.
Q4 is always tough but to be a quarter/25% behind Nov last year (which itself was awful due to Brexit)
Jan will be the test but as said before, n/u car margins and overheads can more than counter a drop in volume.
The auto sector is remarkable resilient so I wouldn't write off the good operators

[essentialinvestor] 04/12/2020 09:50

Right, so is the sector recovery rapidly running out of steam?.

[mortimer7] 04/12/2020 09:02

SMMT figures released today show the total number of new cars registered in the UK in November were 113,781 vs 156,621 last year. A 27.4% reduction on November 2019.

[gutterhead] 03/12/2020 16:10

But, it’s all about margin

[gutterhead] 03/12/2020 16:09

New car regs behind nov last year and that was terrible

[my retirement fund] 03/12/2020 15:29

Looking weak