Vertu Motors ups profit expectations amid used car sales boom

Vertu Motors has upped profit expectations citing strong trading and "exceptional" demand for used cars as the sector booms.

The listed dealership, which has 115 UK sites, said in a pre-AGM trading update that its board expects full year profits to reach between £28 and £32 million, up from previous expectations of £24-28 million.

Demand for secondhand cars is being fuelled by a combination of continued wariness of public transport due to Covid, the global semiconductor shortage - which is restricting production and supply of new cars, leaving retailers to pivot more towards secondhand - and the prospect of a staycation summer when British rail prices are at an all-time high.

Covid initially hit the industry. Vertu slashed 345 jobs and has taken £36 million in Government support since the pandemic broke out, but the boom has triggered a faster-than-expected recovery and seen shares in the sector receive a boost. Shares in Vertu were up 1.3%, or 0.6p, to 46.5p, on Wednesday morning.

Vertu CEO, Robert Forrester, said: “There has been a tight supply of used vehicles coinciding with a period of robust consumer demand, driven by factors such as staycations in the UK.”

Last week international car dealer Inchcape also revealed it has been trading well ahead of expectations. Nathan Coe, CEO of FTSE 100 online car marketplace, Auto Trader, told the Standard this month that the current "bonkers" demand for used cars shows no signs of stopping.