16 January 2019 – acquisition

The automotive retailer has announced the acquisition of the trade and assets of four Volkswagen Passenger car dealerships in West Yorkshire from Goodman Retail Limited, a trading subsidiary of Sytner Group Limited.  Total consideration is expected to be approximately £8.8m and the acquisition should be earnings enhancing in the first full year of ownership, the year ending 28 February 2021.  The purchase of the leasehold dealerships in Leeds, Huddersfield, Harrogate and Skipton represents further expansion of the Group’s Vertu Volkswagen brand and complements 13 existing outlets in Yorkshire, which includes Nissan, Renault, Jaguar, Land Rover, Vauxhall and Honda brands.  Vertu operated 5 Volkswagen Passenger car dealerships prior to the deal.  For the year ended 31 December 2018 the combined management accounts of the dealerships acquired showed that they achieved revenues of £112m and a profit before tax of £0.6m.  There have also been some other portfolio changes recently.  On 20 December 2019 the Volvo franchise in Derby was transferred to a subsidiary of Marshall Motor Holdings plc.  The premises were retained by the Group and are currently being refurbished with a new franchise operation due to commence in the coming months.  In January 2020 two new Hyundai franchise outlets have been opened in the North East of England.  The shares continue to look significantly undervalued.  BUY.