Vertu Reaches Six-Year High as U.K. Car Sales Jump: London MoverNatasha Doff
Vertu Motors Plc jumped to the highest price since 2007 after the U.K.’s largest operator of Honda car dealerships predicted full-year results will “significantly” beat analyst estimates on increased demand.
Revenue in the half ended Aug. 30 climbed 33 percent from a year earlier to 837.2 million pounds ($1.34 billion), the Gateshead, England-based company, which also sells Volvo autos and second-hand vehicles, said today. The shares rose 10 percent to 60 pence.
“Vertu has delivered a record set of first-half results, exceeding our expectations across the board,” Mike Allen, an analyst at Panmure Gordon, said in a note. “There were multiple drivers behind this performance stemming from strong momentum in new cars, a significant used-car performance and further market-share gains in fleet as capacity continues to exit the market.”
New car registrations in September rose 12 percent in the U.K., the Brussels-based European Automobile Manufacturers Association said today. Consumer confidence in the country was at a six-year high last month.
Vertu shares have advanced 44 percent this year, valuing the company at 202 million pounds. The volume of trading today was more than three times the three-month daily average and the stock was the biggest gainer on the FTSE AIM 100 Index.
Allen maintained a buy recommendation on Vertu shares and raised the price target to 77 pence from 63 pence.
Other U.K. car dealers are also benefiting from a recovery in sales. Inchcape Plc has gained about 44 percent this year, while Pendragon Plc has nearly doubled its share price and HR Owen Plc has climbed 176 percent.
Vertu’s first-half net income rose 72 percent to 6.74 million pounds.
Sanjay Vidyarthi, an analyst at Liberum Capital Ltd., initiated coverage of the stock today with a buy recommendation and a target price of 69 pence.