Revenues at Virtu Motors rose to a record £2 billion in the first half of the year even though the group sold fewer cars than previously, with on-going shortages of new vehicles continuing to push prices higher.

The group, which trades under the Macklin Motors name in Scotland, said it expects the tight supply environment to continue “well into” 2023. As a result, full-year profits for the 12 months to the end of February will likely be ahead of market expectations.

The number of used vehicles sold across the group – which includes 160 UK sales and aftersales outlets trading under the Macklin, Bristol Street and Vertu brands – fell by 15.2 per cent during the six months to the end of August to 43,022. New vehicle volumes fell by 10.2% to 42,613.

But according to Vertu the average used car now goes for £19,958, almost a quarter more than in the first half of 2021. Drivers are typically paying £24,294 for a new vehicle, up 13% year-on-year.

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“The first half has seen a strong trading performance with vehicle margin strength offsetting market-driven volume shortfalls,” chief executive Robert Forrester said.

Now the fourth-largest automotive retailer in the UK by revenue, Vertu said it has “significant firepower” to further expand its footprint of franchised dealerships across the UK.

Earlier this year it took over Arnold Clark’s former Toyota territory in the west of Scotland, where it plans to open “a number” of dealerships to serve the brand. The first of these opened in April in the Darnley area of Glasgow, with a second due to begin trading later this month at the group’s former Ford premises in Hamilton.

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First-half revenues were 3.9% higher at £2bn, up from £1.92bn a year earlier. However, pre-tax profit fell from £51.8 million to £28.2m as expenses rose.

This included higher energy costs, increased wages, and other expenses such as training and demonstrations that were curbed last year by Covid safety restrictions. In the previous year the group also benefitted from £5.6m in Government-funded support.

Excluding that support, operating costs were up by 11% as wages – the group’s biggest operating expense – rose by 9% year-on-year. The group said it is also seeking to control costs through its “war on waste” initiative, which led to a 5.3% reduction in electricity consumption in the first half.