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Vertu down 23% after car dealer sounds earnings alarm

Published Dec 07, 2023 09:17 Updated Dec 07, 2023 09:40
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© Reuters Vertu down 23% after car dealer sounds earnings alarm

Proactive Investors - Vertu Motors PLC (LON:VTU)'s shares crashed 23% after the car dealer sounded the earnings alarm.

The company said it faces challenges with expected profitability lower than market forecasts, due to adverse factors in the used vehicle market.

Industry data revealed the impact of the problem with average monthly values being down 4.2% in October and November, with a notably steeper decline in premium brands.

Despite efforts to adapt pricing strategies and manage inventory, gross profits from used car sales were below expectations, investors were told.

Investment bank Liberum cut its share price target by 20p to 100p, but remains a 'buyer'.

It provided this analysis: "Vertu has issued an unscheduled update reflecting more difficult conditions in the used car market, with consumer demand weakening as supply has improved.

"Vertu came into the period having built up stock and subsequently increased stock turn to trade out of the position, hitting margins. Manufacturer vehicle stocking loan costs are higher than expected and the increase in the Living Wage will add to costs in full-year 2025."

In early trade, the stock was off 19.6p at 65.2p.

Read more on Proactive Investors UK

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Vertu down 23% after car dealer sounds earnings alarm
 

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Ian Law
Ian Law Dec 07, 2023 13:11
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Couldnt happen to a “nicer” company. We had an appaulling experience buying from them a few years ago. So bad that we wont even visit any of the groups dealers at all.
 
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