By Kristy Dorsey
Vertu, owner of the Macklin Motors dealerships in Scotland, has signalled its intention to expand through acquisition despite racking up £20 million of losses during the April and May lockdown period.
In its financial results for the year to February 29, the UK’s fifth-largest motor retailer also revealed a slump in pre-tax profits to £5.9m during March, “well below” normal levels of profitability. After solid demand during the first two weeks of the month, activity dipped sharply as the coronavirus pandemic took hold in the UK.
The company, which re-opened its dealerships in England on Monday, said the lockdown losses in April and May were less than it had initially feared. But with the economic crisis set to bring other dealerships under pressure, Vertu remains on alert for expansion opportunities.
READ MORE: Owner of Macklin Motors looks to capitalise on opportunities after lifting of lockdown restrictions
“To deliver long-term value to the group’s owners, the group’s strategy is to continue to grow through acquiring both volume and premium franchise dealerships,” chief executive Robert Forrester said in his summary.
Vertu has a network of 133 sales and after-sales outlet across the UK, including its 10-year-old Macklin Motors chain in Scotland. Macklin is now comprised of 10 outlets following the £30,000 acquisition in January of the trade and assets of the Kia, Suzuki and Mitsubishi franchises on a multi-franchise dealership in Edinburgh from the administrators of Leven Cars.
READ MORE: Road ahead secured in sale of Leven Cars dealerships
Group revenues during the year to the end of February were 2.8% higher at £3.1 billion, with adjusted operating profit holding steady at £23.5m. However, pre-tax profits crashed to £7.3m against £25.3m previously following a £14.4m impairment charge to account for the impact of the Covid-19 pandemic.
From late March, the group furloughed 82% of its 5,877 employees, with Government grants through the Job Retention Scheme totalling £1.8m in March, £8.1m in April, and £7.8m in May. Directors have waived their bonus entitlements for the current year and taken a 30% wage cut, while senior managers have taken a 20% reduction in salary.
The group, which will pay no final dividend, said its Scottish outlets are expected to resume trading in “due course”.
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