Vertu Motors plc

Group revenues grew by approximately GBP 70 million, driven by acquisitions and new business start-ups, while core group revenue declined 0.7% year over year as MINI and Honda agency-model changes reduced core revenue by approximately GBP 70 million. Gross margins were stable at 11.2%, and adjusted operating profit declined from the prior year due to lower profitability in new vehicle retail and fleet channels. Core group gross profit declined by GBP 4.3 million, including a GBP 8.7 million reduction in new vehicle gross profit, offset partly by GBP 8.4 million of additional aftersales gross profit; the JLR cyberattack reduced gross profit by GBP 3.9 million, partly offset by GBP 3.4 million of insurance payout included in FY26 profits. The group generated GBP 30.7 million of free cash inflow, spent GBP 30 million on sustaining capex and GBP 8.2 million on capital projects, and ended with GBP 61.3 million of net debt excluding lease liabilities, down GBP 5.3 million year over year. FY26 final dividend was 1.15p per share, holding the full-year dividend at 2.05p per share, and the company spent GBP 10.7 million on buybacks in the year and announced a further GBP 12 million buyback program for FY27.

Robert Forrester said the business is focused on controlling the controllables amid a volatile backdrop, especially the ZEV mandate, regulatory uncertainty around motor finance, and the JLR cyber incident. He emphasized the resilience of aftersales, the importance of risk management, and the company’s willingness to recycle capital into buybacks, portfolio pruning, and selective Chinese-brand expansion rather than broad acquisitions. His tone was confident and defensive at once: optimistic about execution and opportunities, but clear that sector-wide policy pressure is distorting profits.

Karen Anderson highlighted a second consecutive year of significant cost reduction, with GBP 10 million of savings expected in FY27, supported by roughly 280 further headcount reductions and other initiatives such as charging for wash-and-vacuum, marketing cuts, energy savings, and supply-chain optimization. She said core group operating expenses rose GBP 1.1 million year over year, salary costs rose GBP 3.8 million or 1.5%, and interest costs fell GBP 1.1 million. She also noted the balance sheet remained strong, with GBP 327 million of property, 75.9p tangible net assets per share versus 72.9p last year, GBP 5.1 million of property-sale proceeds, and buybacks totaling GBP 10.7 million in FY26.

Analysts focused on whether cheap Chinese EVs would cannibalize existing brands, whether residual values on Chinese EVs could become a problem, and how exposed Vertu is to used-car price softness. Management said Chinese brands are more likely to draw buyers from older premium used cars than directly from volume franchises, but acknowledged that if supply outpaces demand, prices and residuals will fall. On used cars, Robert said the business is most exposed to sudden residual-value drops, especially for large diesel SUVs, while Karen defended buybacks and said the company has already repurchased 21% of shares and still sees value at prices below tangible net assets.