Acquisition

RNS Number : 4294O

Vertu Motors PLC

29 June 2010

 



29 June 2010

Vertu Motors plc ("Vertu" or the "Group")

Acquisition of Baker (Crewe) Limited business and

assets from administration for £1.5m

Vertu Motors plc, the 8th largest UK motor retailer, is pleased to announce today that its subsidiaries have acquired two Vauxhall franchised outlets from Baker (Crewe) Limited (in administration) ("Baker") for an expected consideration of £1.5m, of which £1.3m relates to freehold property and £0.2m to fixed assets. In a separate transaction Vertu has acquired the working capital for these two businesses, which will amount to some £2m on an ongoing basis. No goodwill has been paid.

Highlights of the acquisition:

·     Freehold property and operations of the Crewe Vauxhall dealership.

·     Leasehold premises and operations of the Macclesfield Vauxhall dealership.

·     Further develops strong regional concentration, building on the presence of Stoke Ford, Crewe Ford and Widnes Motor Nation operations and complementing the Group's existing Vauxhall operations in the adjacent territories of Chesterfield and Matlock.

·     Following the acquisition the Group will have nine Vauxhall dealerships.

·     In the year to 31 December 2009, the unaudited management accounts of the acquired businesses show a combined turnover of £14m.

·     The acquisition will be funded from cash from existing resources and after allowing for the initial investment in advertising and marketing in the new dealerships, they are expected to be earnings enhancing in the year to February 2012.

·     Baker was placed into administration on 29 June 2010.

Vertu believes there are significant opportunities to drive performance improvements and generate incremental profit from the acquired assets and will integrate them onto Vertu's systems platform.

Commenting on the acquisition, Robert Forrester, Chief Executive, said:

"We are delighted to have acquired these businesses in one of our developing geographical areas. Vertu will benefit from building a stronger regional concentration and there is considerable scope to integrate these dealerships onto Vertu's scalable platform. This acquisition provides us with excellent opportunities to strengthen the Group's relationship with Vauxhall, one of our key manufacturer partners."

Vertu also announces that its Annual General Meeting will be held on 22nd July 2010 at 11.00am at the offices of Muckle LLP, Time Central, 32 Gallowgate, Newcastle-Upon-Tyne, NE1 4BF.

- Ends -

For further information please contact:

Vertu Motors plc Robert Forrester, CEO Michael Sherwin, FD	Tel: [phone]
Brewin Dolphin Corporate Advisory & Broking Alexander Dewar	Tel: [phone]
Panmure Gordon (UK) Limited Andrew Burnett	Tel: [phone]
Financial Dynamics Caroline Stewart	Tel: [phone]

Notes to editors

Vertu Motors plc is the 8th largest motor retailer in the United Kingdom with 66 sales outlets forming a national network, operating predominantly under the Bristol Street Motors, Bristol Street Motor Nation, Vertu Honda and Macklin Motors brand names. Manufacturer partners are Citroen, Ford, Iveco, Honda, Hyundai, Mazda, Peugeot, Renault, Vauxhall, Chevrolet, Fiat and SEAT.

Vertu Motors was established in November 2006 with the aim of consolidating the UK motor retail sector. The Group listed on AIM in December 2006.

The Group currently operates 62 franchised sales outlets, 4 non-franchised sales operations and 2 stand alone service operations from 57 locations. It is intended that the Group will continue to acquire motor retail operations to grow a scaled dealership group. The Group's acquisition strategy is supplemented by a focused organic growth strategy to drive operational efficiencies through the national network.

www.vertumotors.com

www.bristolstreet.co.uk

www.vertuhonda.com

www.motornation.co.uk

www.vertucareers.com

www.macklinmotors.co.uk

 

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