Vertu Motors Share Discussion Threads

[dangersimpson2] 07/4/2022 13:39

All risks, and why no-one should be counting on these exceptional profits lasting into 2023. However, they have gone on longer than anyone would have imagined 6 months ago.

I think it would also be daft to assume the dealer model looks similar today even 5 years hence, which is why buying something like lookers with its 20-year leases in some cases, may not turn out to be a wise move. That said the takeover trend has certainly favoured the likes of Marshalls where they have already hived off most of the property part. Obviously makes the takeover easier but seems a bit daft to me since if you can buy the business for the value of the freehold property then you could do the sale and leaseback yourself and get the operating business for very little.

[tony_penny] 07/4/2022 13:30

JUST A THOUGHT COULD CAZOO SNAP UP VTU

[sunshine today] 07/4/2022 11:51

Just be extremely careful that you stock ( cars ) that have been going up in value for years, don’t suddenly fall of a cliff.

The gas guzzlers will not be shifting today, ( as they were ).

You only need one national company to dispose of its inventory over a few weeks at a discount and it’s game up.

Also watch for the tipping point, let’s say prices fall for two months in a row, that alone will hurt sentiment.

Finally inflation is killing the working man, and less well off pensioners.

That’s why the share price here is not a quid despite all the assets, and profits.

Good luck

Just my views.

[dangersimpson2] 07/4/2022 11:44

Not really Vertu's style. More likely to acquire small unlisted independents that are marginally profitable and transform their systems and processes to make them profitable, than pay over the odds for a listed competitor.

£229m of freehold property vs a £215m market cap perhaps puts them at risk of being the other side of a corporate transaction, though.

[microscope] 07/4/2022 11:22

Could VTU emerge as a left field bidder for PDG (or, less probably, Lookers)? I don't see it myself but they could make an offer for Hedin's stake I guess. A full bid might have to pass monopolies' scrutiny.

The buyback has surprisingly dried up for now, which at least makes me wonder if some form of corporate activity is in the offing.

And might have encouraged large holders to have sold in recent days if they suspect something is indeed in the air.

[daneswooddynamo] 07/4/2022 10:25

Not really, sector is a bit weaker I guess and vtu had been pushing up a bit. The current market value of vertu is less than motorpoint, I certainly find that a bit perplexing! Buying more vtu every now and again

[lewaus97] 07/4/2022 10:17

Any thoughts on the drop?

[tole] 27/3/2022 15:07

https://www.fool.co.uk/2022/03/27/5k-to-invest-a-cheap-penny-stock-id-buy-to-hold-to-2032/£5k to invest? A cheap penny stock I'd buy to hold to 2032!I'm looking for the best penny stocks to help me make solid returns over the next decade. Here's one on my radar today.Royston Wild?Published 27 March, 12:51 pm BSTVTUHand holding pound notesImage source: Getty Images.There are plenty of top shares out there to help me make mammoth returns over the next 10 years. Heres one dirt-cheap penny stock I think could make me a fat stack of cash.A top electric vehicle-themed stockI think profits at Vertu Motors (LSE: VTU) could soar over the next decade as demand for electric vehicles (or EVs) takes off.Sales of these low-carbon vehicles are certainly rocketing right now. Latest industry figures showed that battery and hybrid vehicle sales in the UK leapt more than 120% year-on-year in February. And last week the government announced plans for 300,000 charging points to be available by 2030 in encouraging news for the industry.This would be 10 times the current level and could bolster EV sales still further. Concerns over range and ease of charging continue to influence the buying decisions of many people.Vertu Motors operates more than 150 dealerships across the UK and sells product from most of the world's leading carbuilders. It therefore has significant revenues potential as demand for low-emissions vehicles booms (today it sells nine out of 10 of the country's most popular EVs).Threats to Vertu MotorsMy main concern with buying it today is the threat of sinking revenues in the near term. This penny stock is highly sensitive to broader economic conditions so the current cost of living casts a shadow over it. The company also faces the threat of prolonged stock shortages as weak semiconductor supplies persist.Latest figures from the Society of Motor Manufacturers and Traders (SMMT) showed car production in Britain tanking 41% year-on-year last month. This was the biggest February fall for some 13 years.Problems could get even worse too if Covid-19 cases in China keep rising and chip manufacturing is hit.Why I'd still buy this penny stockThat being said, as someone who invests with a long-term view I'd still buy Vertu Motors today. The stock isn't without risk. But this is the same with any UK share and I think the car retailer could deliver delicious shareholder returns over the next decade.Besides, at current prices I think Vertu Motors could be too cheap to miss despite those aforementioned threats. The retailer's share price has slumped around 15% from January's multi-year highs. This leaves it trading on a forward price-to-earnings (P/E) ratio of 8.8 times for this fiscal year (to February 2023). This is well inside value territory of 10 times and below.Vertu Motors also offers plenty of punch from a dividend perspective at recent prices of 64.4p. A predicted 2.3p per share full-year payout results in a chunky 3.3% dividend yield.And what's more, this anticipated dividend is covered 3.5 times by expected earnings, well above the widely-regarded security benchmark of two times. This gives me confidence that Vertu Motors should make this estimated dividend even if conditions in the UK car market worsen considerably in the near term.

[microscope] 22/3/2022 13:01

Spot on Daneswood, my view too. Results tomorrow from PDG and having already reportedly rebuffed a bid, I'd imagine more news on that front too. LOOK has been notably strong too in recent days suggesting more corporate action could be imminent.That would leave VTU as the leading independent, and I think the suitors have been looking elsewhere because they know that they'd have to pay a substantial premium for VTU given the powerhouse balance sheet.So it's understandable that the others are being taken out now, and then I believe they'll then turn attention this way. At that stage we could have a real bidding war.All imho :)

[daneswooddynamo] 22/3/2022 09:08

Buying more, will be amazed if this isn’t swallowed up given the end game looks in sight for look and pdg

[brucie5] 16/3/2022 12:54

Bit of a tick up this morning. Sp failed to break down below the 200ma, I notice, so technical uptrend still in place. Value metrics continue to be excellent. Scores a 99 on Stocko!

[podgyted] 15/3/2022 09:31

Why has the BB ceased? share price below TNAV and below when they announced.

Surely this stop start game just increases uncertainty.

[grahamburn] 14/3/2022 21:40

You are at it again, km18. Historic news from oraclewealth, rather than up-to-date.

Losing count of how many boards you're popping up on - always with last year's figures and comments.

PS Thinking about filtering you very soon unless you can encourage me to visit your website by proving it is up-to-date.

[woodwards26] 14/3/2022 21:12

The fluctuation over the years I have been following has been closer to the 40 area with it always having difficulty holding above 50 .I would love to see it break out and stay over 70 which it is probably worth on 2021 /22 numbers But long term I see it drifting back again next year unless of course which is equally likely as a drift back one of the online companies takes it out .It's a one or the other share to me worth having a few but be aware of downside as well as the upside

[km18] 14/3/2022 16:58

...from last year...

Company overview:
Vertu motors is the fifth largest motor retailer in the UK. The Group is representing 33 different manufacturers across 155 sites in UK. VTU operates mainly through its Bristol Street Motors dealers, which have more than 100 years of history, starting as a single Ford dealership on Bristol Street in Birmingham. During the 15 years of presence on the UK market as a group they managed to quadruple revenues and continuously raise dividends.
The Group was fluctuating for quite a while (nearly 3 years) in the region of 40-50p, a trend that could be seen also in its revenues. So, what is it that differentiates it from the other companies we have covered? This one could take the crown. It is unreasonably cheap at the moment, which supports the share buyback the management has initiated until the end of February 2022. VTU’s main strength comes in the face of its balance sheet. Compared to the other companies we have covered it has the best price for the NTAV. A one-off year like 2021 is bound to bring further strengthening of the financial position for the medium to long term, even if demand normalizes next year. Admittedly the share could stay in the region of 50, which is a risk that should be observed for long term investors. However, if the company manages to move with the trends, which it does, as it is prepared with online buying channels (although management still sees it as a weak proposition with conversion of only 0.8%), even 80% of 2021 volumes would be sufficient for growth to be sustained. Truth be told, the sector is moving very quickly towards subscription-based deals, so what these retailers will turn into are rental companies. This topic deserves a dissertation probably, but now is not the time, in short they can be very profitable if ran with accurate risk and depreciation curve analysis.
Latest trading update, as we noted above, announced a share repurchase which will be of no more than £3m, or 2% of market cap. In addition, the favourable conditions are a solid base on which the management is revising Adjusted PBT for H1 to at least £50m, compare it to July’s update where the figure was £41m and we are looking at 20%. Positive consensus for the stock comes from increasing aftersales margin in recent years. Management’s opinion is that growth is further supported by the general fear of public transportation since last year and when the cycle of today’s shortage of new cars is channelled down to the second-hand market.

Competitors: MMH and PDG, both have the good performance, but none of them has the balance sheet of VTU, and we are fans of stability

Short analysis (FY 2021 as we are waiting for update on 31/08 for the Interim):

Cash went up for the period by 66%, driven by strong Net Income and CFO
Net debt without the IFRS 16 was negative
CA/CL =  1.003
Cash ratio = 0.09
Interest coverage = 3.39
P/S = 0.07, which is the best in the specialty retailers sector
BV ps = 76.3, growing at 5.63%
Operating profit was £31.6m, nearly double the 2020 figure
Gross profit Margin = 11.81%, compared to 10.9% in 2020...

...from WealthOracleAM

[clive7878] 10/3/2022 19:06

So PurplePelmets have VTU as a sell, and both RabidDog and microscpe have VTU as a buy.
We wont be all electric by next year though.
Still many of the cars will be petrol or diesel or hybrid
Although pure electric cars sales numbers are going up,
the garages will still have a lot of work in servicing non pure electric cars,
and cause of the shortage of new cars, the second hand car market will be boyant.

PDG are capitalised at £273 with projected profits of £80m.

[microscope] 10/3/2022 10:58

Exactly, rabid.Infact you could say the p/e is pretty much irrelevant in this case.The balance sheet is likely to show tangible nav around 70p (why else buy back shares around 68p in the previous buyback). Therefore every penny of profit is effectively in for Free at a 60p shareprice, from now on. So in that sense a p/e of 8 or 10 is indeed bonkers.Bonkers low. This is the cheapest stock I know of out there. And as you rightly point out the property part is likely undervalued anyway for example.Shows the naiveté of relying on one metric, such as p/e!

[rabiddog] 10/3/2022 10:32

I make PE around 8 next year. You are also ignoring the cash and property on the balance sheet. Seems cheap to me at current price.

[clive7878] 09/3/2022 22:05

Thought results for VTU were not out until 11th May,
was it going to be not less than £70m, and half of that
£35m for the following year, on a capital of £234m
may be a pe of 5 this year, and 10 next year.

[maverick081267] 09/3/2022 19:07

When are results out??

[clive7878] 05/3/2022 12:13

Lets hope for 80p per share this year with VTU.
Buy backs will obviously help the EPS a little,
and may be reflected in a higher price,
rather than paying a special dividend.

PDG results due around 2 weeks time - could be interesting.

[clive7878] 04/3/2022 19:31

A better day to buy more today after a fair fall in line with market jitters,
in a very volatile market.

[microscope] 04/3/2022 12:20

Don't worry about purple Clive. Said it would be below 50p on open other day on back of excellent trading statement. :) Probably angry about losing on a short trade I imagine.Even if they made 6p next year still a very low p/e of barely 10 by today's market standards. Tangible nav also to be around 70p on results, how many stocks do you know trading below tangible -Tangible! - nav! Terrific balance sheet, and with the property backing as others have said too.Also Clive last two buybacks underpinned rising share price. Whole market understandably jittery with Ukraine, but once that settles down I'm expecting at least 80p here this year.

[purplepelmets] 04/3/2022 09:16

"clive78782 Mar '22 - 15:12 - 2065 of 2069
0 0 0
Profits of not less than £75m on a capitalization of £234m
-you do not need a degree to see that - this stock is undervalued."

It is a one off. Profits are expected to fall off a cliff next year. Does the market look forwards or backwards? ask yourself that when trying to understand VTU.