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Vertu Motors buys outlets from Inchcape for £18.7m; trading ahead of budget
StockMarketWire.com
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Auto dealer Vertu Motors said it had acquired a market area of 12 sales outlets in England from Inchcape for £18.7 million, giving it a significant exposure to BMW and Mini vehicles.
The deal would also come with the assumption of manufacturer-used vehicle stocking finance of £8.9 million.
The sales outlets were located in York, Sunderland, Teesside, Durham and Malton.
Vertu said deal had been been funded with a combination of a new £12.8 million 20-year mortgage facility from BMW Financial Services and payment from the company's existing cash resources.
For the year ended 31 December 2019, the acquired business achieved revenues of £305 million and a £6.0 million pre-tax loss.
Vertu Motors said it had 'a clear plan to drive performance improvements over a three-year period', with the acquisition expected to be at least earnings neutral by the year ending 28 February 2023.
Separately, the company said its performance had remained ahead of prior year and original budget levels.
For the nine months through November, it was trading about 15% above last year at an adjusted pre-tax profit level, despite the impact of the further national lockdown in England on vehicle sales.
'Overall profit performance has benefited significantly from the continued business rates holiday on showrooms, grants claimed for colleagues furloughed and the impact of cost savings from the previously announced cost reduction programme,' the company said.
'It remains uncertain as to whether trading performance for the remainder of the financial year will continue at the level seen year to date, particularly given the potential impact on trading of further Covid-19 restrictions and the impact of Brexit from 1 January 2021.'
'Following the announcement of the acquisition above, losses are anticipated to arise in the acquired business in the remaining three months of the financial year.'
Story provided by StockMarketWire.com
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