Vertu Motors – 37.25p

3 December 2012 – acquisition

The company has announced the acquisition of the trade and assets of Springfield Cars Limited’s Honda operations for a total estimated consideration of £3.7m, including goodwill of £0.8m.  The consideration will be settled in cash from existing resources.  Springfield has also subscribed £0.3m in cash for 797,872 ordinary shares in Vertu Motors at 37.6p per share, which appears positive.  In the year ended 31 December 2011, the management accounts of the acquired businesses showed a turnover of £29.2m and an operating profit before interest and tax of £0.3m.  The dealerships are expected to make a small loss in the three months to the end of the current financial year and to become earnings enhancing in the year to February 2014.  We rate the shares as a BUY.

 

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