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Chairman's Corporate Governance Statement

The Group has again executed well, in what turned out to be a challenging Year, delivering an Adjusted 1 profit before tax of £37.8m, broadly in line with analysts’ expectations. There were noteworthy highlights in the Year:

  • The successful integration of the significant Helston acquisition completed in December 2022 and the bolt on acquisition of Rowes in October 2023, augmenting the Group’s growing presence in the Southwest of England.
  • The delivery of operational excellence and digitalisation continued with the full roll-out of the Group’s in-house analytics system ‘Vertu Insights’, a used vehicle stock management tool. Use of this dynamic tool helped the Group to successfully navigate the significant impact of movements in the wholesale used vehicle market in the second half of the Year.
  • The roll out of the in-house developed ‘Pay Later’ product to all Group sites, allowing customers to spread their vehicle repair payments interest free over 3-5 months. This has aided conversion of the sale of repair work identified as part of the Group’s vehicle health check process, and reduced costs compared to a third-party solution.
  • The successful reduction of vacancy levels, particularly in respect of service technicians.
  • A 9.3% increase in the annual dividend per share reflects the Board’s confidence in the Group’s future trading and continued strong free cash flow generation.
  • The return of £7.5m to shareholders through the purchase of 11,343,372 shares for cancellation, representing 3.3% of opening total issued share capital.
The Board welcomed two new non-executive directors during the Year. John Mewett, the Chief Executive Officer of Screwfix, part of the Kingfisher plc group, joined the Board in June 2023. John is responsible for the development of the Screwfix business across the UK, Ireland and France and has over 25 years’ retail experience. David Gillard, a Non-Executive Director and the Chair of Audit Committee at Bradford and Sons Limited, a builders’ merchant, joined the Board in January 2024. David was previously the Group Finance Director and Deputy to the Managing Partner at DAC Beachcroft LLP, the international law firm. David will replace Ken Lever as chair of the Audit Committee when Ken leaves the Board at the forthcoming AGM after nine years’ service. I would like to take this opportunity to thank Ken for his tremendous contribution to the strategy and success of the Group over his nine-year tenure.

The Board is cognisant of possible challenges in the year ahead. These include the impacts of a General Election, high interest rates and a cost-of-living squeeze on consumer confidence. There is additionally, potential for disruption in new vehicle supply as the UK Government seeks to transition to battery electric vehicles and Manufacturers attempt to navigate new emission legislation and potential significant fines. These impacts have the potential to effect revenues and profitability in the short-term. We remain, however, focused on the delivery of the Group’s long-term strategic goals, appropriate capital allocation and free cash flow generation.

The Group’s performance is, as always, the result of the commitment and hard work of all colleagues. I would like to thank all the team for their continued effort and dedication.

Andrew Goss, Non-executive Chairman

1 Adjusted to remove non-underlying items

15 May 2024

QCA Code Principle Pages in 2023 Annual Report
1. Establish a purpose, strategy and business model which promote long-term value for shareholders. Group Strategy - pages 10-20
2. Promote a corporate culture that is based on ethical values and behaviours. Roles and Responsibilities – page 60
Division of Responsibilities – page 59
3. Seek to understand and meet shareholder needs and expectations. investors.vertumotors.com
4. Take into account wider stakeholder interests, including social and environmental responsibilities and their implications for long-term success. s172 statement - pages 5-8
5. Embed effective risk management, internal controls and assurance activities, considering both opportunities and threats, throughout the organisation. Risk Management - pages 46-50
6. Establish and maintain the Board as a well-functioning balanced team led by the Chair. Board Leadership - pages 55-58
7. Maintain appropriate governance structures and ensure that individually and collectively the directors have the necessary up-to-date experience, skills and capabilities. Division of Responsibilities – page 59
Audit Report - pages 82-89
Board Leadership - pages 55-58
8. Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement. Chairman’s Corporate Governance Statement - page 53
9. Establish a remuneration structure which is supportive of long-term value creation and the company’s purpose, strategy and culture. Remuneration Committee Report - pages 66-72
10. Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other key stakeholders. Remuneration Committee Report - pages 66-72

Terms of Reference

View matters reserved for the Board - September 2023