‘New vehicle market conditions were heavily influenced by the Government’s ZEV mandate, which continued to distort manufacturer behaviour’
Bosses at motor retailer Vertu have marked a solid year of trading in a challenging year for the sector – but urged the Government to accelerate its review of electric vehicle sales targets. The Gateshead based dealership, which has a network of 191 sales and aftersales outlets across the UK, published full year results for the year ended February 28 2026, highlighting good results amidst a number of challenges.
Revenues reached £4.83bn, up 1.5% from £4.76bn, while adjusted pre-tax profit was £24.5m, down 16.4% from £29.3m but ahead of market expectations despite weak new vehicle markets. Net debt stood at £61.3m, down from £66.6m. Adjusted operating profit was £46.5m, down 11.3% from £52.4m
It said the group’s resilient aftersales operations delivered record performance – now generating over 46% of group gross profit. The group also saw a £2.9m uplift in core group gross profit in March and April, compared to the prior year.
As we reported earlier this month, it also booked £3.4m of insurance proceeds – recognised as other income – offsetting losses from the JLR cyber-attack of £3.9m. The AIM-listed group said the impact of the Middle East conflict on fuel price volatility, consumer confidence, and vehicle demand is being monitored but that no material adverse consumer trends are visible as yet.
As expected, however, it said that Battery Electric Vehicles (BEV) and hybrid vehicles are seeing higher interest from customers, and warned that a prolonged conflict could drive up inflation. Last month the group launched Value Cars by Vertu, an initiative to increase market share in the seven-to-14-year-old used car market, and initial indications are that this will add incremental profits.
Looking ahead, it said a programme to boost its portfolio with new Chinese entrant brands is set to continue, with Jaecoo, Omoda, Lepas, Chery and Leapmotor to be added to its portfolio, joining its five BYD dealerships.
CEO Robert Forrester said: “The group has delivered solid results against the backdrop of sector pressures from the Government’s ZEV mandate on new car profitability, as we have focused on controlling the controllables, such as aftersales and cost. The group is benefiting from stable management, a highly trained and committed workforce, strong cashflows funding a maintained dividend, another £12m share buyback and significant asset backing.
“The group is therefore excellently positioned to take advantage of the inevitable opportunities that will arise as the sector continues to consolidate. I am delighted that the trading performance in March and April has been strong and ahead of the prior year period, which is a testament to the quality and hard work of the excellent Vertu team, whom I would like to thank.”
Meanwhile, Vertu highlighted how the Zero Emission Vehicle (ZEV) mandate scheme is hitting its profits and “distorting” its volumes and margins. The scheme was introduced by the Government to force motor manufacturers to sell more electric vehicles each year or face steep fines, as part of its plans to move all new car sales to EVs by 2035.
Chairman Andy Goss said: “New vehicle market conditions were heavily influenced by the Government’s ZEV mandate, which continued to distort manufacturer behaviour, suppress retail margins and shift volume into lower‑return channels. Consumer and business confidence also remained subdued generally.”
At present, the planned consultation on the ZEV scheme is not set to be published until next year.
But Vertu said: “The ZEV mandate is distorting volumes, margins and channel mix for new car and commercial vehicles, alongside elevated discounting and potential non‑BEV supply constraints. The ratcheting of targets creates more intense pressure and the Group has asked the Government to urgently bring forward its review of the ZEV mandate from 2027 to 2026.”
Mr Forrester added: “The UK retains one of the most ambitious BEV transition trajectories among major automotive markets, with manufacturers of cars required to achieve a 28% BEV mix in 2025 and 33% in 2026, facing fines of £12,000 per vehicle for non-compliance. Future targets ratchet up significantly to an 80% mix in 2030. BEVs accounted for only 23.4% of car registrations in 2025, achieved largely through financially unsustainable manufacturer discounting.
“The SMMT estimates discounting of BEV vehicles exceeded £5bn in 2025 (at least £11,000 per BEV), distorting both new and used car markets and creating sustained margin pressure across the sector. By the end of April 2026, BEV share stood at 23.1% calendar year to date, leaving uptake short of the 33% share required.”
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