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Highlights

  • Full-year FY26 adjusted profit before tax expected to be in line with market consensus, with September order book ahead of prior year.

  • Used car volumes and margins stable despite market pressures, while aftersales delivered growth in profitability.

  • BYD expansion continues with three new outlets set to open by November, alongside continued share buyback activity.

Vertu Motors plc (LSE:VTU), one of the UK’s largest automotive retailers with 195 sales and aftersales outlets, has issued a trading update for the five-month period to 31 July 2025, ahead of its interim results due on 8 October. The Group confirmed that full-year FY26 adjusted profit before tax is expected to be in line with current market consensus.

New Car Sales
The UK new retail car market remains under pressure from the Zero Emission Vehicle (ZEV) mandate and lower consumer confidence. Vertu recorded like-for-like new retail volumes up 1.4% during the period, slightly ahead of market trends, though margins came under pressure from tactical activity and pre-registrations. The Group noted that Motability registrations fell 21.7% on a like-for-like basis, broadly in line with the 19.8% market decline.

The change in sales mix supported improved new car margins in the Core Group, which rose to 8.0% from 7.8% in the prior year. Fleet volumes increased 13.6%, slightly ahead of the market, with demand particularly significant in electric vehicles. However, commercial vehicle volumes declined 4.1%, outperforming the wider UK market, which fell 9.0%.

The Government’s July announcement of new grants to encourage EV adoption is expected to support demand in the second half of FY26, benefiting many of the Group’s franchises. Vertu’s September order book is already slightly ahead of the prior year.

Used Vehicles
Supply constraints for three-to-five-year-old vehicles and increased availability of nearly new stock shaped the used car market during the period. Despite these challenges, Vertu delivered slightly higher like-for-like used car volumes year-on-year, supported by a successful July sales event and the Group’s data-driven pricing approach.

Used car margins remained stable, with gross profits rising on a like-for-like basis. The UK market overall continued to show stability, supported by limited availability of desirable stock.

Aftersales and Cost Management
Aftersales operations delivered significant like-for-like gross profit growth, supported by higher invoice values, pricing actions, and initiatives such as enhanced vehicle health checks and wider adoption of the Pay Later product. Service gross margins increased to 73.6% from 72.5% a year earlier.

Operating expenses were held flat year-on-year on a like-for-like basis despite wage and tax increases, reflecting successful cost control measures, reduced energy use, and ongoing efficiency initiatives. The Group approved a further GBP 900,000 investment in solar panels to continue lowering energy costs.

Portfolio and Capital Returns
Vertu continues to expand its brand presence, with three new BYD outlets scheduled to open in Hartlepool, Macclesfield, and Morpeth by November, bringing its total BYD representation to five. The Group also closed a Citroën dealership in Nottingham, which will be refranchised to Škoda later in the year.

The company continues its share buyback programme, with GBP 6.4m of the GBP 12m authority expended by 31 August, equivalent to 9.4m shares repurchased. Since 2017, over GBP 41m has been returned to shareholders, reducing the share count by more than 19%.

Outlook
The Board expects H1 profits to be lower year-on-year due the  comparative period in FY25. However, the September trading month is anticipated to underpin profitability in the second half, supported by improving EV affordability and Government incentives. The used car market is expected to remain stable, and aftersales momentum is set to continue.

Vertu confirmed its interim results for the six months to 31 August 2025 will be released on 8 October 2025.