VERTU Motors, the car retailer with eight dealerships in Scotland, is on the hunt for acquisitions north of the Border after announcing plans to raise £50 million in new equity funding.

Vertu's chief executive Robert Forrester will travel north next week to assess potential targets as the company looks to add to its sites in Dunfermline, Hamilton, Paisley and Glasgow. The six sites trade as Macklin Motors and sell a range of brands.

Mr Forrester said there are opportunities to add to its portfolio in Scotland, in spite of the dominance of Arnold Clark.

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Future acquisitions will be financed by funds raised by a placing announced yesterday, which will see the company raise £50m from existing shareholders and new investors through the issue of 131,578,948 new ordinary shares.

The new shares, which will be priced at 38p, will represent around 39.7% of the enlarged share capital further to their admission to the stock market. Shareholders will vote on the plans at the company's general meeting on June 7.

Mr Forrester said the placing will allow the company to maintain its strategy of growth through acquisitions.

Mr Forrester said: "It [the car market] is less fragmented in Scotland. There is still opportunity in Scotland but clearly Arnold Clark is the dominant force.

"What the £50m placing does is, with a modicum of debt, gives us about £40m to spend, so we will be working on further acquisitions [and] trying to bring new franchises into the portfolio to broaden the franchise mix."

Vertu's commitment to expansion was highlighted yesterday when it revealed it had spent £31m on acquiring Albert Farnell, the company behind three Land Rover dealerships in West Yorkshire, from the Co-operative Group.

The deal, which marks the company's first foray into a "premium marque", was heralded by Mr Forrester as a significant milestone in the company's history.

He said: "I would say today is as important for the group as the day we bought our first dealerships from Bristol Street Motors in 2007.

"Albert Farnell is a very strong business – [it has] strong cash flow, strong profitability. Land Rover is a very loved franchise.

"It is interesting that Lookers bought a Land Rover franchise in Glasgow earlier on in the week.

"We are pleased to have got into that franchise. Our shareholders are very supportive, we raised £50m at 38p and brought some new investors into the business as well. Some very good institutional investors have come on board."

Vertu yesterday reported pre-tax profits of £4.5m for the year ended February 29, a fall of 18.2% on previous year. The profits fall stemmed from exceptional charges of £3.3m linked to the reorganisation of its portfolio.

Some 20 outlets were acquired or moved to new sites, while the company sold a used car outlet, seven franchised outlets and four accident repair centres.

Mr Forrester said the company made loses of £1.6m on the businesses acquired last year but expects those "underperforming" assets to "turn round" in the next financial year. Since year end the company has disposed of its Iveco heavy commercial vehicle business, which incurred an £800,000 charge.

Turnover across the company's network of 96 UK sites rose by 15.7% to £1.26 billion for the year.

Mr Forrester said: "The results are pleasing because there are some really nice trends. The biggest trend is that we have grown adjusted operating profits from continuing operations by 31%, which reflects the fact that the significant number of acquisitions we have done over the past few years are starting to produce a return.

"That is very important to us because that is actually our business model, particularly in the area of used cars.

"We have converted profit into cash flow and some more – [there's been] a 73% improvement in operating cash inflow, which is always good because it shows the profit is real. And we have improved dividends by 16.7%, which is an important piece of the jigsaw for shareholders."

Mr Forrester said the company had benefited from improving consumer confidence in the UK, and stated his belief that the economy is performing better than official statistics indicate.

He said: "The consumer in the UK is in quite a good position. The manufacturers in Europe are faced with 30% to 40% of over-capacity and declining European car sales which is quite precipitous.

"The UK consumer is the one group in the entire Euro- pean continent to have any inkling about wanting to buy a car. If you put a good deal in front of consumers they will buy a car."

Shares in AIM-listed Vertu closed up 0.25p at 41.25p.