Auto dealer chain Vertu Motors released a second earnings upgrade in less than a month, as bosses said the used car market continued to grow even faster than expected.
Profits for the year are now expected to be between £ 50 million and £ 55million, against previous estimates of between £ 40million and 45million.
However, the company also warned that despite the strong performance, uncertainty remains due to the pandemic.
Vertu FURTHER Raises Profit Forecast to £ 50-55 Million Thanks to ‘Exceptional Used Car Market Conditions’ https://t.co/leOyZAqHDZ
– Robert Forrester (@vertumotorsCEO) August 20, 2021
Bosses said future restrictions and coworker absences could play a role.
Vertu added: “The current UK-wide labor shortages, high levels of job vacancies and upward pressure on employment costs remain a risk for the company. “
But the biggest concerns remain supply issues in the new car market, with the entire industry suffering from a shortage of computer chips used in vehicles.
However, the lack of new vehicles is boosting the used car market, with recent data showing used vehicle sales at record levels.
New vehicle order intake for the key month of September is currently exceeding the levels of the previous year; however, there is a risk that well-documented supply shortages of new vehicles could cause vehicle deliveries to be delayed in future periods.Vertu Motors
Vertu said: “New vehicle order intake for the key month of September is currently exceeding the levels of the previous year; however, there is a risk that well-documented supply shortages of new vehicles could cause vehicle deliveries to be postponed to future periods.
“Due to the reduction in the supply of new vehicles, the supply of used vehicles could also be limited in the coming months. “
After the upgrade, the company said it will also reintroduce a dividend to shareholders and launch a £ 3million share buyback program.
Sanjay Vidyarthi, analyst at Liberum, said: “August is generally one of the quietest months of the year, so seeing this level of upgrade in such a short period of time indicates remarkable market conditions as well. that a solid trade by the company. “