- Vertu snaps up Wiper Blades for £3.5 million
- Acquisition to boost current year earnings
- Omni-channel operator Vertu looks a future winner
Shares in Vertu Motors (VTU:AIM) revved up 1.3% to 54.7p after the UK’s fifth largest automotive retailer announced the acquisition of Worcestershire-based e-commerce business Wiper Blades.
Gateshead-based Vertu expects the £3.5 million purchase to enhance its earnings in the current financial year to February 2023.
ABOUT WIPER BLADES
Wiper Blades specialises in selling car wiper blades and other associated products online and generated pre-tax profits of £500,000 on £2.2 million sales in the year to August 2021.
‘This acquisition is in line with the stated strategy of the group to develop ancillary businesses to add revenue and profit streams that complement the core business and is further adding digital capabilities and reach,’ enthused Vertu Motors, which trades under the Bristol Street Motors, Vertu and Macklin Motors brand names.
Deal-hungry Vertu explained that Wiper Blades complements the Powerbulbs.com business it bought in June 2021 and stressed that both businesses are ‘complementary additions’ to the Aceparts e-commerce business it snapped up in 2015.
Vertu’s CEO Robert Forrester insisted the company’s e-commerce parts business is ‘performing strongly’ and the addition of Wiper Blades will be ‘accretive both financially and strategically to that part of the group.
‘The acquisition is in line with our strategy to develop ancillary businesses which complement the core business and enrich our digital capabilities to continue to provide technology leading edge service to our customers.’
MARGINS HOLDING UP
In its recent annual general meeting (AGM) trading update, Vertu Motors assured the market margins in both new and used cars have remained strong against a backdrop of ongoing vehicle supply constraints in the UK caused by dislocation in global supply chains and its impact on vehicle production.
‘The market outlook remains unclear due to uncertainty of consumer demand and vehicle supply although new vehicle supply is anticipated to improve gradually in the months ahead,’ said Vertu Motors.
‘The group has had a strong start to the financial year but it is premature at this stage to indicate any changes to market expectations of the full year trading profits.’
As Shares outlined here, Vertu Motor has returned to the dividend list after a Covid hiatus and continues to play its part in the consolidation of the fragmented UK automotive retail market, taking share through acquisitions supplemented by organic growth.
While consumer confidence could come under pressure, this well-established omni-channel operator looks a future winner, having offered full online sales of used cars ahead of anyone else back in 2017.
