Sterling’s weakness put the brakes on car retailer Vertu Motors’ shares as the drop in the currency made the cost of imported cars rise, writes Bradley Gerrard.
The Gateshead-based firm said the supply of new cars to the UK had been hit by the pound’s drop against currencies such as the euro, Japanese yen and Korean won and pushed prices of cars made in these countries up for British buyers.
Management also said uncertainty surrounding the general election and Brexit had contributed to “the most volatile consumer environment” the company had seen since the eurozone crisis in 2013.
While pressures were evident in the six months to the end of August, such as margins being squeezed in its used car business, the continued rise in sales from factors such as post-purchase servicing gave management confidence to increase the dividend by 10pc to 0.55p per share.
And the company will buy back £3m of shares on top of the £1.6m it has already spent.
Vertu has also said it will sell and lease back some of its car showrooms to free up some cash, which rose to £20.8m in the period under review.
Vertu Motors has blamed sterling’s weakness for higher car prices
Robert Forrester Chief executive