North East motor retailer Vertu has raised its full-year profit expectations for a third time after a strong first six months. The Gateshead-based business, which operates 196 sales and aftersales outlets across the UK, reported record revenues of £2.6bn for the six months to August 31, up from £2.51bn, with like-for-like revenue growth of 4.3%.
Record half-year results
Adjusted operating profit rose to £34m from £31m, while adjusted pre-tax profit increased 19% to £23.8m. Net debt was cut to £54.2m from £78.3m, which the company said was substantially below expectations.
The group said full-year results are anticipated to be ahead of current expectations, marking the third upgrade to current-year profit since the start of the financial year. This follows a strong start to the second half, with profit above prior-year levels.
Growth drivers and Chinese brands
Growth was driven by the new vehicle retail market, supported by an increase in the retail mix, pre-registration activity and the impact of Chinese brands. September, the key plate change month, was stronger than anticipated, underpinned by a robust new car market.
The group is expanding its portfolio, with 20 Chinese brand outlets today and a further 11 planned to open in the next nine months. As of August 31 it had 18 sales outlets representing Chinese automotive brands, including BYD and MG – double the number a year earlier. Chinese brands, excluding Volvo, accounted for 24.5% of September retail registrations and all of the overall market growth.
Used vehicle trading and market outlook
Vertu said used vehicle trading continued to improve, with like-for-like volumes and retained margins ahead of the prior year. Consumer demand remained resilient, stock turn was healthy and market valuations remain stable. Its 'Value Cars by Vertu' initiative, which sells older used cars, also continued to perform well.
Chief executive Robert Forrester said the Zero Emission Vehicle (ZEV) mandate continues to impact the sector, affecting everything from new vehicle pricing to vehicle supply. He said pressure is likely to remain even if the Government revises its position as part of a current consultation, in which Vertu is involved.
In his review of the period, Forrester said: “BEV (Battery Electric Vehicles) registrations grew strongly, reaching almost 356,000 units in the first eight months of 2026, a 25.6% year-to-date market share to the end of August. This remained well below the 33% headline requirement under the Government’s Zero Emission Vehicle (ZEV) mandate for 2026 and indeed last year’s target level.”
He added: “This is despite extensive manufacturer discounting, enhanced range and technology, increasing model availability and Government incentives. The ZEV mandate continues to negatively impact the sector through its impact on manufacturer pricing, channel mix and vehicle supply.”
Forrester noted that the statutory headline targets for 2026 currently remain 33% for cars and 24% for vans, supported by compliance flexibilities within the Vehicle Emissions Trading Schemes. He said the Government opened a formal review of the ZEV mandate on August 14, 2026, seeking views on the annual target trajectory, the effectiveness of existing flexibilities and possible alternative approaches. The consultation remains open until October 23, 2026, and no changes to the current legal targets have yet been announced.
“Whatever the results of the consultation, the guardrails set by the Government are likely to mean that targets out to 2030 may be relaxed but will remain very stretching and have serious and increasing negative impacts on the whole UK automotive sector,” he said.
Forrester added that the board remains mindful of the effects of inflation on consumer confidence and the potential for increases in interest rates. He said: “Despite this, the strong year to date underlying profit before tax delivered gives the board confidence that full year underlying profit before tax should exceed current expectations. The group is very clear on its strategic priorities including further growth in sales outlets.”
