Vertu Motors interim results H1 FY26: record revenue, solid margins, one-off JLR hit
Vertu Motors delivered a steady set of half-year numbers in a tough market. Revenue hit a record £2,510.0 million for the six months to 31 August 2025, with adjusted profit before tax of £20.0 million versus £22.1 million last year. Costs were kept on a tight leash and market share edged up across new retail, fleet and commercial channels.
The fly in the ointment is the September cyber-attack on Jaguar Land Rover’s systems. Vertu runs 10 JLR sites, and the outage knocked £2.0 million off September trading and is expected to hit FY26 adjusted PBT by up to £5.5 million. Management says underlying PBT for the year, excluding this one-off, should be in line with market expectations.
Headline numbers investors should know
| Metric | H1 FY26 | H1 FY25 |
|---|---|---|
| Revenue | £2,510.0m | £2,474.6m |
| Adjusted profit before tax | £20.0m | £22.1m |
| Basic adjusted EPS | 4.57p | 4.77p |
| Dividend per share | 0.90p | 0.90p |
| Free cash flow | £0.4m | (£14.3m) |
| Net debt | £78.3m | £83.9m |
| Group gross margin | 11.2% | 11.1% |
| Tangible NAV per share | 76.1p | 72.9p (28 Feb 2025) |
What drove the performance: aftersales and used cars did the heavy lifting
Vertu’s most profitable areas performed well. Aftersales gross profit rose £4.0 million like-for-like, helped by better pricing and initiatives that lift average invoice values. Aftersales is high margin work such as servicing and repairs, and it contributed 44.7% margin and £127.0 million of gross profit.
Used cars were resilient despite stock constraints in the key three-to-five-year age cohort. Like-for-like used gross profit was up £0.6 million even after higher internal prep costs. The Group’s used car pricing algorithm – Vertu Insights – helped hold margins steady at 7.1%.
New retail and Motability was the main drag, with like-for-like gross profit down £4.4 million. The UK Motability market was weak, as expected, and pre-registration activity in the wider market inflated SMMT stats that do not translate into Vertu’s new retail volumes. Fleet and commercial saw a £1.2 million like-for-like gross profit reduction as Vertu prioritised volume to curb manufacturer stocking charges.
BEV momentum and market share gains
Battery Electric Vehicle (BEV) retail volumes grew 82.4% like-for-like, far ahead of the UK BEV market’s 55.2% growth. Affordability has improved markedly, and Government grants announced in July are expected to support H2 demand. Across new retail, fleet and commercial, Vertu lifted total market share to 4.5% (H1 FY25: 4.4%).
JLR cyber-attack: size of the impact and what it means
On 31 August, a cyber-attack forced a shutdown of JLR’s systems, disrupting production, deliveries and parts nationwide. Vertu’s 10 JLR dealerships were hit hard during the key plate-change month. September trading took a £2.0 million knock, and the Board currently expects a one-off full-year adjusted PBT impact of up to £5.5 million, depending on how quickly systems normalise. Management notes the situation has eased in recent days.
Importantly, Vertu has business interruption insurance that extends to third-party systems outages and is working with brokers to assess a claim. Excluding this event, underlying FY26 profit before tax is expected to be in line with market expectations. As a marker, compiled consensus as at 7 October put adjusted PBT at £27.2 million (range £26.5 million to £27.5 million).
My take: this is a genuine one-off operational disruption rather than a competitive or execution issue. Insurance may mitigate part of the hit, and the early signs of easing are helpful. The episode does not change the strategic picture.
Costs, cash and capital allocation: tight discipline continues
Like-for-like operating expenses were up just 0.3% year-on-year despite big rises in National Minimum Wage and Employer NI from April. Salary costs rose only 0.2% like-for-like, aided by prior headcount actions. Practical savings – from charging for post-service “wash and vac” to lower energy costs – are adding up, with an estimated £0.4 million profit enhancement from valeting changes and a £0.6 million reduction in energy costs.
Free cash flow came in at £0.4 million, a significant improvement on last year’s outflow. Working capital absorbed £21.0 million, mainly from higher used inventory (£14.5 million) to support sales and lower new vehicle deposits (£11.2 million). Three surplus properties were sold for £3.3 million, 10.7% above book value. Net debt excluding leases was £78.3 million, slightly higher than year end but lower than H1 FY25.
The Board is sticking to a balanced returns policy. The interim dividend is maintained at 0.90p per share, payable in January 2026. The £12.0 million buyback programme is ongoing – 9.4 million shares were repurchased in the Period for £5.6 million, with £7.0 million of the authority expended by 30 September. Since 2017, over £42 million has been returned via buybacks, cutting the share count by over 19%.
Brand, BYD and digital: positioning for the next leg
Vertu completed its rebrand to a single Vertu masthead across the Group, retiring Bristol Street Motors and Macklin Motors. Prompted national brand awareness has already risen from 11% in March to 19% in September, which should support marketing efficiency and conversion.
The Group is leaning into the rise of Chinese EV brands with BYD. Three more BYD outlets open by 1 November, taking the total to five. The thesis is simple: representation should mirror where demand is heading, but with a watchful eye on returns.
Digitally, Vertu’s in-house team is pushing practical AI pilots that improve contact handling and automate lead responses, plus Open Banking-enabled aftersales payments to trim merchant fees. The main retail website is being rebuilt under the single brand, with completion targeted for mid-2026, and SEO visibility has improved.
September trading and outlook: cautious, but underpinned
Excluding the JLR disruption, September profit was ahead of last year. Like-for-like new retail sales rose 1.8% in a market up 8.9% due to elevated pre-registrations. Used volumes grew 5.8% like-for-like with stable margins, supported by good stock levels. Fleet volumes rose 25.0% and commercial 1.5% like-for-like, excluding JLR, with increased gross profit generation. Aftersales demand remained strong.
The Board remains cautious given weak consumer confidence and macro uncertainty ahead of the Autumn Statement. Even so, excluding the one-off JLR event, full-year underlying PBT is expected to be in line with market expectations.
Key watch‑outs for H2
- Speed of full JLR systems restoration and any insurance recovery.
- BEV demand uplift from Government grants and ongoing manufacturer discounting.
- Motability volumes stabilisation ahead of an expected pick-up from March 2026 renewals.
- Used car supply in the three-to-five-year cohort and margin discipline.
- FCA’s proposed motor finance redress scheme – currently proposed to be levied on lenders; no provision made.
- HMRC’s draft ECOS changes now delayed to October 2026, with a potential up to £2.5 million cost impact flagged by Vertu.
- Execution on BYD rollout and continued brand consolidation benefits.
My investment view: resilient engine, temporary pothole
There is plenty to like here. Record revenue, margin resilience, aftersales growth, BEV outperformance and disciplined costs all speak to strong operational control. The balance sheet quality is improving, with tangible net assets per share up to 76.1p, and the shareholder returns story is consistent with a maintained dividend and ongoing buybacks.
Negatives are mostly cyclical or external: Motability was a headwind, the wider new retail market remains choppy due to the ZEV mandate, and the JLR cyber-attack is an unhelpful one-off. Net debt has ticked up from year end, reflecting working capital choices to support sales, but remains manageable.
Bottom line: if you believe the JLR disruption fades and BEV grants support H2 volumes, Vertu looks set to deliver underlying FY26 profit in line with expectations while continuing to compound value through costs, aftersales, and capital discipline.
