AIM-quoted car dealership Vertu Motors (AIM:VTU) faced weaker sales volumes amid a fast-shifting market backdrop in the five months ending 31 July.
New car volumes fell 5.8% on a like-for-like basis, though Vertu highlighted that this was above the 12.1% decline in new registrations per Society of Motor Manufacturers and Traders data.
“The retail new car market remains weaker as the government's regulation to transition to battery electric vehicles causes market volatility and negative impacts,” said chief executive Robert Forrester.
Management called the results “broadly in-line with currency market consensus”, adding that first-half profits “will be lower than prior year levels as anticipated”.
Used car sales were the bright spot in the trading update. Margins in this segment improved from 7% to 7.2%, driven by robust valuations due to constrained fleet supply.
The high-margin after-sales segment also added to group profitability.
However, rising salary costs and higher vehicle expenses and interest costs “led to an increase in operating expenses as a percentage of revenues”, though specific operating margins for the five-month period were not provided.
Shares dipped 2.3% in opening Monday exchanges.