Lookers ready to hit top gear says boss

LOOKERS, the North West car dealership group, said it was in good shape to benefit from the recovery after posting better-than-expected half-year results.

The Manchester-based group also backed sector calls for an extension to the Government’s £2,000 scrappage scheme, which encourages consumers to trade their old cars in, and therefore boost the depressed new car market.

Lookers reported a 13.5% rise in pre-exceptional first-half profit to £17.6m on turnover down 16% at £870.4m, and said trade in the second half would continue to be challenging, especially in the new car market.

Chief executive Ken Surgenor, who is retiring later this year, and will be replaced by former CD Bramall boss Peter Jones, told TheBusinessDesk: “It has not been easy, but we are delighted with the results in this market place.

“We have taken some pain, closing 21 franchised outlets last year, but we had to restructure the business.

“We have also completed the £80m refinancing – but it is not included in these figures – which we will use to reduce debt. As a result I believe we are in a very, very strong position to benefit from the upturn in the market and any green shoots in the consumer market.”

Mr Surgenor, who will run Lookers’ Northern Irish business Charles Hurst when he leaves his executive role, said the company had sold 3,000 new cars under the scrappage scheme, and backed calls for it to be extended.

“I believe it’s cost neutral for the Government, and it has also increased footfall into the showrooms and helped protect jobs, so it should absolutely be extended.”
Lookers, which has over 120 dealerships nationwide and a booming parts business, said its new vehicle sales volumes were down 19% – against the UK market average of 26%.

Mr Surgenor added: “Demand for new cars has continued to fall and whilst the introduction of the UK Government’s £300m vehicle scrappage scheme has gone some way to stimulating the market, uncertainties in the financial markets and rising unemployment continue to suppress consumer demand.”

Lookers said used car sales rose 8.5% due to a strong recovery in used car values since the second half of 2008.

The Old Trafford-based firm said it would not pay a dividend this year as it was focused on reducing debt, but said it would return to making a payout in 2010.