Vertu Motors Share Discussion Threads

[wad collector] 11/11/2022 09:10

Microscope , you ask my point when I questioned the price of the deal. That is the whole point, how can you celebrate it before you know the price? Granted, they have acquired wisely in the past , but that does not guarantee that this is good news. And the market has not exactly celebrated it either. Yet.

[dennisbergkamp] 10/11/2022 22:50

Would it be a possible t/o target? Second hand prices are crazy! Any thoughts on how close the chip shortage resolution is?

Ta,
D

[clive7878] 10/11/2022 21:59

Vtu will find it difficult to aquire something else also on a pe of 5, which could be a drawback

[microscope] 10/11/2022 21:08

This isn't your typical bolt-on acquisition, it should be transformational.

[woodwards26] 10/11/2022 18:43

-Of course pretty decent dividends along the way And more recently share buy backs happening to reduce total shares in issueMaybe the long term shareholders apart from the 49 p cost per share can look forward to a market repricing if the market agrees with asset value but I think the market is pricing it just right.Hopefully someone else proves me wrong with a bid well above 49p.To me it's just been savvy accountant based thinking and issuing of shares rather than savvy motor trade management.We will need savvy management certainly over the next few months with used car values now retreating and both good staff and customers harder to find and retain.

[woodwards26] 10/11/2022 18:32

I'm still waiting for that savvy bit to be provedMy simplistic view is and I'd love someone to point out if I have any basic error in my logic -It cost 60 p a share at initial offering with a core aim to build a group by acquisition which has happened and continues to happen.Various times new shares have been issued to fund the core aim but only once has a placing taken place where a shareholder was able to participate . I think this was in 2013 and it about doubled the shareholding at 38 p a share and was fully subscribed.So a private shareholder has bought shares at 60p and 38p which by coincidence averages 49p a share about the same as todays price so not that good an investment to me to call them savvy management .Of course pretty decent dividends along the way

[clive7878] 10/11/2022 17:15

Believe that past record shows VTU has some savvy management and that any future deals should prove to be beneficial. Savings may be able to be made on streamlining the business.

[microscope] 10/11/2022 15:06

So, what's your point, Wad?

Lots of good ones in history, lots of bad ones. As GB rightly points out in VTU's case good ones.

And the point about paying the right amount, already fully covered by other posters.

[grahamburn] 10/11/2022 15:00

Vertu have an excellent record of not over-paying for acquisitions.

[wad collector] 10/11/2022 14:34

I get that a big acquisition is potentially exciting , but surely it rather depends on the price paid?
These are uncertain times , and history is rather full of ambitious acquisitions that were later regretted.

[clive7878] 09/11/2022 22:23

Some reports on Google are to sell financial reports on companies- one says worth is £281m and profits £30.4m, there was another saying worth was £626m which must be incorrect.
So could be interesting going forward.

I thought that dealers did not want customers to buy cars out right, as they make more money selling to customers on credit agreements. I believe that 91% of cars bought are either on credit agreements or fleet cars.

I thought I read that Helston had quite a number of directors, so maybe their salary bill is quite high, thus the low margin of profit on the capitalisation.

[jeff h] 09/11/2022 19:36

South west based Helston Garages Group is set to be broken up and sold to three dealer groups. Vertu is expected to take the majority of the dealerships with neighbouring Yeomans taking the Volkswagen Group franchises and Rybrook taking the Porsche operation.

According to Auto Retail Agenda sources staff were told about the potential sale this morning, 9 November, just ahead of a Stock Exchange announcement by Vertu which stated there was the potential for a transaction.

The Vertu PLC statement said: “Vertu Motors confirms that it is in advanced discussions regarding the potential acquisition of Helston Garages Group Limited, a privately owned predominantly premium manufacturer automotive retail group based in the Southwest of England. These discussions may or may not lead to a transaction. Funding for the transaction, were it to occur, would be from re-financed and new debt facilities, including long-term mortgage funding.”

Helston operates 37 franchises across Cornwall, Devon, Somerset and Dorset including five Volvo, five Peugeot, five BMW, four Mini, four Jaguar Land Rover, four Skoda, two Volkswagen cars, two VW Commercial Vehicles, one Audi and a Ferrari dealership. The group also has two used car operations.

The south west group’s accounts for 2021 show the firm had a turnover of £626.7 million and a pre-tax profit of £30.4m. The return on sales was 4.9% and more than double that of any previous year.

The 2021 turnover figure was up from £511.6m in 2020, but down on its 2019 figure of £643.4m.

Auto Retail Agenda also understands that should the sale be successful it is likely to be completed by the end of the month.

Vertu hinted it was planning to expand through acquisition in its half year year results published last month.

[otemple3] 09/11/2022 18:12

Microscope, it cannot be £200m+ as it would be classed as an RTO and would be suspendedDanger, agree on your points especially the last one on the buyback

[microscope] 09/11/2022 17:44

People do need to read the earlier posts and links (not just mine lol).... Well the VTU specific ones! For an EBITDA around 34 million, price at a guess be 200 million, p/e 6. That would be great value.But given willing sellers, and a possible deal with other interested parties, no knowing yet what the outcome will be, might be even cheaper.This is a statement buy imho, a company in a great place right now, exuding confidence in their business and sector.

[otemple3] 09/11/2022 17:12

No way it will be anything like that. We haven't been suspended so can't be considered an RTO, so must be less that £170m

[riverman77] 09/11/2022 17:10

That surely can't be right, would be incrediblely expensive if true (4-5 times more expensive than VTU itself.)

[clive7878] 09/11/2022 16:43

Pomanda estimates Helston Garages to be worth £621.7m based on a turnover of £626.7m - so a real big acquisition if it goes ahead.
Pretax profits said to be £30.4m.
Correct me if I am wrong but that would mean pe of 20.

[microscope] 09/11/2022 14:53

Excellent spot otemple, Yes it would be a massive undertaking for VTU alone, but the fact they talk of refinancing and new lines of credit in the statement would probably indicate that VTU are very likely to be the dominant player in any transaction.

[otemple3] 09/11/2022 14:26

Looks like we may be part of a carve up rather than taking the whole lot https://twitter.com/rhomboid1MF/status/1590315729286332416?t=DE7ahvl84oxU_osLDbI-PQ&s=19

[microscope] 09/11/2022 14:10

Wow this is Massive!! Turnover 626 million, ebitda 33.9 million.

According to this, wife has sadly passed away too. Ferrari among brands.

[microscope] 09/11/2022 12:43

Market often sluggish to absorb announcements made in trading hours, can take a few days.And clearly they'll want to see the full financial details, as will we all of course, but as you rightly say EC the sellers will be willing, and that should help Vertu negotiate an excellent price.

[effortless cool] 09/11/2022 12:00

This potential acquisition is big and the Helston Group looks to be a good business.



It looks like the main man behind the business died last year and his and his wife's holdings are now concentrated in discretionary trusts. Hence, they are likely willing sellers to diversify the asset base for the beneficiaries.

[microscope] 09/11/2022 11:47

Very positive and exciting news! I've been saying for a couple of months now, despite the naysayers, that it was pretty obvious major corporate activity seemed imminent.I wonder why they've made a statement now, not at 7am, perhaps they have wind of news about to leak, or maybe they're hunted as well - and their hand has been forced.

[santangello] 09/11/2022 10:42

.....perhaps the buyers of late are 'informed' peeps ahead of todays possible purchase ?