Really good interim results from Vertu Motors today.
It looks like they are successfully grabbing market share from larger rivals.
Gearing is modest, cash flow great. You don't giet a dividend at the moment but surley rivals will have to cut theirs
Decent commentary at www.investorschampion.com with peer group comparison

Vertu Motors acquires three Honda dealerships
StockMarketWire.com
Vertu has acquired the trade and assets of three Honda dealerships in Nottingham, Derby and Stockton-On-Tees from Lookers for a total consideration of approximately GBP2m.

ST of IC today - On a bid-offer spread of 71p to 71.75p, and offering decent upside to my fair value target range of 85p to 90p, I see a short-term trading buy opportunity here.

KEEP an EYE

VTU 61.375p ( 61.25 / 61.50p )

Has come down a long way and now below last month placing @ 62.50p to make acquisitions. Results next month, should show further improvement on results as the car market is growing fast. "Trading ahead of expectations with record revenues and profits". Low PE

note - The UK’s new car market grew by 5.3% in March.

There is a seller at the moment on the order book @ 61.50p, is shows on the trades as "AT", twice has been added on 10K size once was taken as "AT".

buys are now taking place at this low prices, and the order book get stronger on the bid side and price 61.25p

so far has found a bottom at 60.25p, but the order book is still very balance since earlier weakness and the seller is still around being very persistent on the order book

Vertu Motors - Research from Simply Wall st Automotive Retail
Company description
Vertu Motor plc operates as an automotive retailer in the United Kingdom. More info.

Value

Vertu Motors's value based on future cash flows and its price relative to the stock market.

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.

VALUE BASED ON FUTURE CASH FLOWS

The estimated value of Vertu Motors shares based on future cash flows discounted to their present value. Learn more.

Here we compare the current share price of Vertu Motors to its discounted cash flow value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Current Discount

Amount off the current price Vertu Motors is available for.
Intrinsic value
25%
Share price is £0.63 vs Future cash flow value of £0.84
Current Discount Checks

For Vertu Motors to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
Vertu Motors's share price is below the future cash flow value, and at a significant discount (> 20%).
Vertu Motors's share price is below the future cash flow value, but not at a substantial discount (< 40%).

PRICE RELATIVE TO MARKET

The relative price of Vertu Motors shares compared to stock market averages.

We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avacados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Vertu Motors's earnings, growth and assets is considered below, and whether this is a fair price.

Price based on past earnings

Are Vertu Motors's earnings available for a low price, and how does this compare to other companies in the same industry?
Good value based on earnings compared to the Retailing industry average.
Good value based on earnings compared to the overall market.

Price based on expected Growth

Does Vertu Motors's expected growth come at a high price?
Information is not available.

Price based on value of assets

What value do investors place on Vertu Motors's assets?
Good value based on assets compared to the Retailing industry average.
Show me more potentially undervalued companies in the Specialty Retail industry
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Value checks

We assess Vertu Motors's value by looking at:
Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) (Click here or on bar chart for details of DCF calculation.)

Is the PE ratio less than the market average, and/ or less than the Retailing industry average (and greater than 0)? (2 checks)

Is the PEG ratio within a reasonable range (0 to 1)? (1 check)

Is the PB ratio less than the Retailing industry average (and greater than 0)? (1 check)
Vertu Motors has a total score of 4/6, see the detailed checks below.

Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.
Note 2: PEG ratio is based on analysts EPS growth expectations in 1 year (0%).

Full details on the Value part of the Simply Wall St company analysis model.
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Discounted cash flow (Free cash flow to Equity)

The calculations below outline how a value for Vertu Motors is arrived at by discounting future cash flows to their present value.

In this approach analyst's estimates of Levered Free Cash Flows are used to obtain the Equity Value.

If no analyst estimate is present the free cash flows are forecast from the last known value using the normalised growth rate in revenue over the past 5 years. This growth rate is capped at 20% in the first year and reduces going forward by 1% per year.

You can read more about discounted cash flow (DCF) here.

A 2 stage model is used which includes 5 years of growth followed by perpetual stable growth. All values in GBP Millions unless otherwise stated.

5 year cash flow forecast
2016 2017 2018 2019 2020
Levered FCF (GBP, Millions) £22.70 £-1.90 £14.60 £22.40 £25.40
Source Analyst x1 Analyst x1 Analyst x1 Analyst x1 Analyst x1
Present Value
Discounted (@ 8.4%) £20.94 £-1.62 £11.47 £16.23 £16.98
Present value of next 5 years cash flows:
£64

Terminal Value
Terminal Value = FCF2020 × (1 + g) ÷ (Discount Rate – g)

Terminal Value = £25 × (1 + 1.9%) ÷ (8.38% – 1.9%)

Terminal value based on the Perpetuity Method where growth (g) = 1.9%:
£400

Present value of terminal value:
£268

Equity Value
Equity Value (Total value) = Present value of next 5 years cash flows + terminal value

Value = Total value / Shares Outstanding (£332 / 396)

Value per share:
£0.84

Current discount (share price of £0.63): 25%

Estimate of Discount Rate
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.

Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)

Discount rate = 8.38% = 1.92% + (0.8 * 8.08%)

Estimate of Bottom Up Beta
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm).

Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))

0.516 = 0.505 (1 + (1- 21%) (2.78%))

Levered Beta used in calculation = 0.8

Assumptions
The risk free rate of 1.92% is from the 10 year government bond rate in United Kingdom.
The bottom-up beta is estimated by analysing other companies in the same industry.

The Equity Risk Premium is calculated by subtracting the risk free rate from the market return premium (10%) (source: Buffet).
The dividend discount model is automatically used for companies in the following industries: Banks, Insurance, Real Estate Investment Trusts (REITs), Diversified Financial Services and Capital Markets.

Future Performance

Vertu Motors's expected performance in the next 1 to 3 years, based on estimates from 5 analyst(s).

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Insufficient estimate data, unable to calculate 1 year growth expectation.

Past and Future Earnings per Share

The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.

Analysts growth expectations

2 year growth check

Super high growth metrics x1.5?
Which of the these is expected to increase by over 50% in 2 year's time?

Revenue
Cash flow
Profit

Performance in 3 years

In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
No 3 year Return on Equity data available.

Improvement & Relative to industry

No 3 year Return on Equity data available.
No 3 year Return on Equity data available.

Future performance checks

We assess Vertu Motors's future performance by looking at:

Is the growth in earnings expected to beat the low risk savings rate, plus a premium to keep pace with inflation, in 1 year and 3 years? (2 checks)
Does the average analyst expect Revenue to increase by 50% or more in 2 years? (1 check)
Does the average analyst expect Operating Cash Flow to increase by 50% or more in 2 years? (1 check)
Does the average analyst expect Net Income (Profit) to increase by 50% or more in 2 years? (1 check)

Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Vertu Motors has a total score of 0/6, see the detailed checks below.

Note: If no +3 year data is available, +2.5 year data may be used.

Note 2: We use GAAP per Share in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

Vertu Motors's performance over the past 5 years.

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.

Past earnings growth

Below we compare Vertu Motors's growth in the last year to its industry (Retailing).

Earnings growth analysis

We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
Vertu Motors's earnings growth has exceeded the industry average over the past year.
Vertu Motors's 1 year earnings growth exceeds its 5 year annual average (21.6% vs 20.1%).
Vertu Motors has delivered strong earnings growth in the past 5 years.

Profit History

Vertu Motors's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.

Performance last year

We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
Poor return on shareholders funds (ROE) last year.
Vertu Motors performed worse than the Retailing industry average based on return on assets (ROA) last year.
Performance based on revenue producing assets (ROCE) is broadly the same over 3 years.

Past performance checks

We assess Vertu Motors's performance over the past 5 years by checking for:
Has earnings per share (EPS) increased in past 5 years? (1 check)
Has the EPS growth in the last year exceeded that of the Retailing industry? (1 check)

Is the current EPS growth higher than the average annual growth over the past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Vertu Motors has a total score of 4/6, see the detailed checks below.

Note: We use GAAP Earnings per Share in all our calculations.

Health

Vertu Motors's financial health and their level of debt.

A company's financal position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Vertu Motors's finances.

The net worth of a company is the difference between its assets and liabilities.

Net Worth

Vertu Motors short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Vertu Motors's cash and other short term assets cover its long term commitments.
Balance sheet

This treemap shows a more detailed breakdown of Vertu Motors's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets

Liabilities and shares

The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
High level of stock/ inventory/ unsold assets.
Company has no debt.

Historical Debt

Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
The level of debt (4%) compared to net worth is satisfactory (less than 40%).
The level of debt compared to net worth has been reduced over the past 5 years (14% vs 4% today).
Total debt is well covered by annual operating cash flow (greater than 20% of total debt).
Interest on debt is well covered by earnings (17x coverage).
Financial health checks

We assess Vertu Motors's financial health by checking for:
Are short term assets greater than short term liabilities? (1 check)
Are short term assets greater than long term liabilities? (1 check)
Has the debt to equity ratio increased in the past 5 years? (1 check)
Is the debt to equity ratio over 40%? (1 check)
Is the debt covered by short term assets? (1 check)
Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
Vertu Motors has a total score of 5/6, see the detailed checks below.


Full details on the Health part of the Simply Wall St company analysis model.

Income

Vertu Motors's current dividend yield, its volatility and sustainability.

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income

Dividend payments
1.64%
Current annual income from Vertu Motors dividends. Estimated to be 3.02% next year.
If you bought £2,000 of Vertu Motors shares you are expected to receive £33 in your first year as a dividend.
Dividend Amount

Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
Paying below low risk savings rate. (2.15%)
Paying below the markets top dividend payers. (4.65%)

Historical dividend yield

It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 5 years.
Dividends per share have been stable in the past 5 years.
Dividends per share have increased over the past 5 years.

Current Payout to shareholders

What portion of Vertu Motors's earnings are paid to the shareholders as a dividend.
Dividends paid are well covered by net profit (5.6x coverage).

Future Payout to shareholders

Dividends after 3 years are expected to be well covered by net profit (3.6x coverage).
Income/ dividend checks

We assess Vertu Motors's dividend by checking for:
Firstly is the company paying a notable dividend (greater than 0.5%) - if not then the rest of the checks are ignored.
Current dividend yield, is there one at all, is it higher than the low risk savings rate, and is it above the top 25% of dividend payers? (2 checks)
Has the dividend been volatile in the past 5 years (drop of more than 25%)? (1 check)
Has the dividend increased in the past 5 years? (1 check)
How sustainable is the dividend, can Vertu Motors afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
Vertu Motors has a total score of 4/6, see the detailed checks below.


Vertu Motors's CEO's compensation, management and board of directors tenure and insider trading.

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.

CEO

Robert Forrester, image provided by Google.
Robert Forrester
COMPENSATION £519,000
AGE 46
CEO Bio

Mr. Robert Forrester serves as the Chief Executive Officer of Vertu Motors Plc. Mr. Forrester serves as Vice President of Automotive Fellowship International. He served as the Managing Director of Reg Vardy PLC from June 1, 2005 to the sale of the business to Pendragon plc in 2006 and served as its Finance Director since 2001. He has been an Executive Director of Vertu Motors Plc since December 20, 2006. Mr. Forrester served as an Executive Director of Reg Vardy Plc from 2001 to February 15, 2006. He is a Member of the Economic Affairs Committee of the Confederation of British Industry and the Investment Committee of St Hugh's College, Oxford. Mr. Forrester qualified as a Chartered Accountant with Arthur Andersen.

CEO Compensation
CEO's compensation has been consistent with company performance over the past year.
CEO's compensation appears reasonable.
Management Team

Robert Forrester

TITLE
Chief Executive Officer
COMPENSATION
£519,000
AGE
46
Michael Sherwin

TITLE
Chief Financial Officer

COMPENSATION
£395,000
AGE
57
David Crane

TITLE
Chief Operations Officer and Member of Operations Board
Nicola Loose

TITLE
General Counsel and Member of Operations Board
Steve Ferry

TITLE
Group Sales Director and Member of Operations Board
Liz Cope

TITLE
Chief Marketing Officer
Board of Directors Tenure

Average tenure of the Vertu Motors board of directors:

Board tenure
5.5 years
The tenure for the Vertu Motors board of directors is about average.

Bought 2nd lot @ 60.40p as the order book was getting stronger this morning

VTU should benefit from that

European car sales rise 5.7 pct in March but VW brand dips
Fri, 15th Apr 2016 07:00 - By Costas Pitas

LONDON, April 15 (Reuters) - European new car sales rose 5.7 percent last month, industry data showed on Friday, despite a fall in sales for Volkswagen's core brand and fewer trading days in March due to Easter.

Sales of VW brand models slumped 4 percent in January but returned to growth in February suggesting the impact from the diesel emissions scandal was beginning to wane.

But demand fell 1.6 percent in March, according to the European auto industry association ACEA, despite the brand recording its best performance in Britain, Europe's second largest car market, since September.

There were fewer trading days in March due to Easter, which fell in April in 2015, but VW's mass-market brand rivals Peugeot , Ford and General Motors' Opel/Vauxhall all grew, with sales up 2 percent, 0.6 percent and 6.4 percent respectively.

Overall, registrations rose to 1.745 million cars from 1.652 a year earlier, according to data for the European Union (EU) and the European Free Trade Association (EFTA).

In the first three months of the year, registrations increased 8.1 percent to 3.932 million vehicles compared to the same period in 2015.

Nearly every European country recorded growth last month but sales fell 0.7 percent in Spain and dipped marginally in Germany, the continent's biggest automotive market.

Italy recorded the strongest rise of any major market with demand rising 17.4 percent followed by France where sales increased 7.5 percent.

The ACEA said EU sales rose for the 31st month in a row in March hitting levels close to those recorded in 2007, shortly before the economic crisis began to hit the car industry.

59.875p +0.125p

Holding well on a down day, waiting for the results due just over 2 weeks time .......

8th March 2016 RNS - The Group will announce its preliminary results for the year ended 29 February 2016 on 11 May 2016.

This from VTU - Investigate

Overview
· The Board expects trading performance for the year ended 29 February 2016 to be ahead of current market expectations, anticipating record revenues and profits in the period.

· In the five months ended 31 January 2016 ("the Period") the Group saw continued growth in volumes, revenue and profits:

Have added some at 59p after news earlier of acquisition, order book is looking stronger on the bid side as volume has been rising, now ready for the results next week wednesday 11th

Liberum note - Research Tree

Read Liberum's note on VERTU MOTORS PLC (VTU), out this morning, by visiting https://www.research-tree.com/company/GB00B1GK4645

"Vertu has acquired Leeds Jaguar for a consideration of £650k. There is strong growth potential, although the acquisition is small and we do not change our forecasts at this stage. Importantly, it represents the first deployment of capital from the recent £35m fundraise in March and we anticipate plenty more M&A, as Vertu continues its role as an industry consolidator. We expect a strong set of prelims (Wednesday 11th May) to be the next positive catalyst ..."

Acquisition of Leeds Jaguar and expansion of Farnell brand

Vertu, the UK automotive retailer, announces that it has completed the acquisition of the business and assets of Leeds Jaguar (the "Business") from Inchcape Retail Limited for an estimated total consideration of £650,000.

Highlights:
· High quality business with potential for earnings growth as brand develops
· Further development of the Group's representation of Jaguar in the North of England combining Jaguar and Land Rover operations in the Leeds territory
· Opportunity for marketing and management synergies as acquired business will operate under the Farnell brand and management structure
· Secures a key target acquisition as set out at the time of the recent capital raise.

The business will operate from its current premises in the short term and will then relocate to a newly developed site alongside the Group's existing Leeds Land Rover operation. Total consideration, which includes £500,000 of goodwill, is estimated at £650,000 and will be settled in cash from the Group's existing resources.

For the year ended 31 December 2015, the management accounts of the Business showed that it broke even in the period. The Board expects this acquisition to be earnings neutral in the current financial year and earnings enhancing thereafter.

The acquisition will complement the Group's existing Land Rover dealership in Leeds and further extend the Farnell brand. Following completion the Group will operate five Land Rover dealerships and three Jaguar dealerships.

Robert Forrester CEO of Vertu said:
"We are delighted to be able to announce a further acquisition to augment our Jaguar Land Rover business in the North of England. Leeds Jaguar will complement our award-winning Land Rover operation in Leeds and will strengthen our Farnell brand in the North.

The Jaguar brand is set for significant expansion given the fantastic new models that are being launched, such as the F-Pace. The Jaguar line-up is now more extensive than in its entire history."

There is some larger size buying now and holding to yesterday's close, on a very down day once again for the FTSE now 76 points after being down to 6100, were there is some support.

DEPTH of 22 v 13
on a spread of 58.75 v 59p
33K v 18K
The 18K has just being place after the last 12K were taken as an "AT"

2 year chart

Comparing with another motor stock

Stock ---- share price -- EPS Year 2016 -- PE Year 2016

Lookers ------ 132p -------- 12.88p ----------- 10.25
Vertu --------- 57p ---------- 6.9p ------------- 8.26

EPS = Earning per share
PE - Price earning

note - Lookers 12.88p already announced last March
Vertu 6.9p are due on Wednesday

Very much in touch the 3 motor players

3 month

6 month

Some blue from early and on a very strong order book on the bid side DEPTH of 25 v 15
it helps than earlier CAMB released very good Interims and is up 10%

59.75p +2.50p

moving up on the right way now on a very strong order book on the bid side DEPTH of 35 v 17

COMPARING

60.75p +3.50 (+6.11%)

A very large interest today AHEAD OF RESULTS TOMORROW, volume of 3.3M

Vertu Motors plc, the UK automotive retailer with a network of 127 sales and aftersales outlets across the UK, announces its audited results for the year ended 29 February 2016.

Revenue	£2,423.3m	£2,074.9m	16.8%
Adjusted EBITDA*	£35.5m	£28.7m	23.7%
Adjusted operating profit*	£28.6m	£22.7m	26.0%
Adjusted profit before tax*	£27.4m	£22.0m	24.5%
Adjusted earnings per share*	6.46p	5.15p	25.4%
EBITDA	£34.5m	£28.0m	23.2%
Operating profit	£27.2m	£21.7m	25.3%
Profit before tax	£26.0m	£21.0m	23.8%
Earnings per share	6.06p	4.87p	24.4%
Operating cash inflow	£65.8m	£26.1m	152.1%
Net cash	£23.1m	£15.7m	47.1%
Net assets per share	58.0p	52.7p	10.1%
Tangible net assets per share	38.3p	38.3p	0.0%
Dividend per share	1.30p	1.05p	23.8%

A few things that are of special attention from the results ............

Earnings per share 6.06p 24.4% ( growing by a large amount after acquisition )
Net assets per share 58.0p ( that is almost what share price is )
Dividend per share 1.30p 23.8% ( a very large increased good for shareholders )
Net cash GBP23.1m 47.1% ( almost doubling previous amount )

Now needs Directors buys, like today's news at CAMB