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Vertu Motors PLC reported weaker sales volumes for the five months ending 31 July, attributed to ongoing market volatility influenced by the transition to electric vehicles (EVs). The Industrial sector is navigating significant changes as the industry shifts toward battery electric vehicles.
Sales and Market Impact
New car volumes declined by 5.8% on a like-for-like basis, which is a milder reduction compared to the 12.1% drop in new registrations reported by the Society of Motor Manufacturers and Traders. Chief Executive Robert Forrester attributed the weaker retail new car market to government regulations driving the transition to EVs, which have introduced market volatility and negatively impacted sales.
Vertu Motors PLC (LSE:VTU) described the results as "broadly in-line with currency market consensus" and indicated that first-half profits are expected to be lower compared to the previous year, as anticipated.
Strengths in Used Car Sales and After-Sales
Despite the challenges in new car sales, Vertu Motors experienced a positive performance in the used car segment. Margins improved from 7% to 7.2%, benefiting from strong valuations due to limited fleet supply. Additionally, the high-margin after-sales segment contributed to overall group profitability.
Operational Challenges
The company noted an increase in operating expenses as a percentage of revenues due to rising salary costs, higher vehicle expenses, and increased interest costs. Specific operating margins for the five-month period were not disclosed.
