Market Report: Vertu Motors’ £12.8m acquisition of VW and Audi dealer raises eyebrows in the City
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Your support makes all the difference.Two weeks ago, adding Audi to the list of Vertu Motors’ car dealers would have been seen as another feather in the AIM-listed company’s cap. But with the car industry reeling from the Volkswagen emissions scandal, the company’s £12.8m acquisition of SHG Holdings, a VW and Audi dealer in Hereford, raised eyebrows in the City.
Increasing exposure to the VW crisis seems a strange move; the German carmaker, which also owns Audi, will now account for 9 per cent of revenues, against 6 per cent before.
But Vertu’s house broker Liberum Capital insisted the move was “strategically sound”, in spite of the diesel car scandal which is expected to cost VW billions of pounds in fines.
The car dealership’s other house broker Zeus Capital said Vertu, which reversed 1p to 66p, will still have less exposure to VW than its peers. These include Lookers, 0.2p lower at 166.5p, Marshall Motor Holdings, flat at 181p, and Inchcape, 15.5p better off at 734.5p.
Johnson Matthey, whose shares have also been hurt by the scandal, was driven 20p higher to 2,468p as the catalytic converter maker completed the £256m sale of its Alfa Aesar research chemicals business.
A poor start to the final quarter of the year on Wall Street took the edge off a strong performance from UK stocks. Up more than 100 points in the morning, the FTSE 100 retreated in the afternoon to finish 10.86 points higher at 6,072.47.
Investors in Tullow Oil, which gushed 16.3p higher at 185.4p, breathed a collective sigh of relief after banks showed their faith in the company despite lower oil prices by keeping credit lines unchanged at $3.7bn.
The sausage maker Cranswick, which has risen 19 per cent this year, swelled a further 93p to 1,689p after revealing that first-half revenues were better than expected.
Shares in cash-strapped broker Daniel Stewart were suspended as it missed Thursday’s deadline to publish its annual accounts. It said it was close to securing a much-needed funding deal.
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