NORTH-EAST motor dealer Vertu saw profits soar last year, helped by the car scrappage scheme.

The Newcastle-based company saw its profits before tax rise to £4.6m in the year ending February 28, up from only £70,000 the previous year.

During that time it increased its number of dealerships from 44 to 60 following a £30m share placing on the Alternative Investment Market (AIM) last June to fund its expansion programme.

The group now operates six dealerships in the North-East under the Bristol Street Motors and Bristol Street Motor Nation brand names.

Chief executive Robert Forrester said: “2009-10 proved to be a much stronger trading period than anticipated, due to the twin supports of the Government’s scrappage programme and the strengthening of used car values.

“The group’s strong cash position and continued cash generation means we can continue our growth in 2010 and beyond and gain the scale benefits of this growth.”

Although the scrappage scheme is now over, new car sales account for less than 18 per cent of the group’s profit.

It expects after-sales, used cars and fleet sales to remain resilient, with fleet demand increasing as firms replace older cars that would have been changed earlier if not for the recession.