NORTH-EAST motor company Vertu yesterday announced a £30m share placing on the Alternative Investment Market (AIM) to fund an expansion and acquisition programme which could see turnover reach £1bn.
The Bristol Street Motors brand owner, established in 2006, said its home region would be a key target for its expansion, continuing its stellar growth over the past three years despite the widespread downturn in the motor industry.
The Newcastle-based firm has become the ninth biggest dealership in the country, recently announcing sales of £760m this year, and operates a network of 45 dealerships across the UK, four of which are in the North-East.
From starting out as a twoman operation, it now has more than 2,000 staff across the country.
Shareholders in Vertu yesterday approved the share placing, which will allow the company to buy dealerships to add to its portfolio.
It hinted at its future expansion when it announced plans to open a Bristol Street Motors dealership in Darlington, adding that it “certainly hoped to increase numbers further” in the North-East.
Yesterday, Robert Forrester, chief executive at Vertu, said: “Over the past 12 months, the automotive retail sector has encountered the most challenging market conditions for many years, but we believe that opportunities are beginning to emerge. Our trading performance in March and April this year was ahead of expectations and used car volumes and margins ahead of 2008 levels.
“We have already successfully integrated our previous acquisitions and plan to use this funding to invest in new dealership operations and extend the productive capacity of existing operations, maximising our market share in the coming years and continuing our growth.”
Commercial law firm Muckle LLP, based in Newcastle, and nominated advisors Brewin Dolphin both advised on the fundraising programme.
Andrew Davison, partner at Muckle, said: “We are committed to supporting businesses and it has been fantastic to see Vertu Motors develop into a national leader, in just three years.
“It is encouraging that a North-East company is bucking the national trend by looking to increase its market position, to ensure that it is in a position of strength for when consumer confidence returns.”
Graeme Summers, head of investment banking at Brewin Dolphin, which has branches in Newcastle and Teesside, said: “Our team’s experience in this sector is perfectly matched to Vertu’s ambitions, as it plans to grow through targeted acquisitions.”
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