Vertu Motors (AIM:VTU) has reported quarterly volume growth but also warned of uncertainty across the UK’s vehicle market amid high interest and inflation.
Sold volumes of new and leased cars jumped by 10.8% in the three months to May, the company reported on Wednesday, while margins remained largely flat at 7.9%, compared to 8.0% last year.
“The market outlook, however, remains unclear due to uncertainty of consumer demand in the light of the impact of inflationary pressures and higher interest rates,” Vertu said.
Supply constraints continued to hit the company’s used car wing, which marked mixed news as volumes fell 5.9% during the quarter, but prices per unit increased by 3.4%.
Regardless, Vertu commented that “the board remains optimistic for the future,” pointing to forecasts from industry body SMMT that the UK will see 1.83mln new car registrations this year, marking a rise of 13.5%.
"I am pleased to report that trading remains positive,” said Vertu chief executive Robert Forrester. “Used car pricing has remained firm and we have gained market share in the new car market. The performance of our high margin aftersales business has remained strong.”
AIM-listed Vertu noted that full-year trading should meet market expectations, with the takeover of Helston Garages in December 2022 pushing profit higher than last year.
Analysts at Liberum Capital reiterated Vertu as a ‘buy’ following the update, noting that the firm is a “top pick” thanks to a focus “on driving profitable sales growth while keeping a tight control on costs”.
Vertu shares slipped 0.7% to 69p.