Car dealership group Lookers ahead of the market

Andy Bruce

Lookers, the Timperley-based car dealership group, has reported better revenues and profits for the half year to June 30, and said it is on course to meet full year expectations.

Turnover for the six month period rose by 5% to £2.58bn, and pre-tax profits of £45.7m were 2% better than the same period last year.

However, these included a £7.6m gain on a property sale, the company revealed.

Last week Lookers completed a sale and leaseback agreement on its headquarters building with Carrick Real Estate, acting on behalf of Savills Investment Management, in a deal believed to be in the region of £5m.

During the reporting period the firm said new car turnover was stable, with the reduction in volumes less than the overall market decline.

Total group turnover of used cars increased by 12% and gross profit increased by 4%.

Turnover for aftersales increased by 6% and gross profit increased by 7%.

Lookers said it invested £14m during the six month period into improving its dealership facilities, while it strengthened its portfolio of franchise representation by closing two dealerships and opening one new site.

Looking ahead, it said while the impact of Worldwide Harmonised Light Vehicle Testing Procedure, which is aimed at establishing the official fuel consumption and CO2 emissions of new cars, has the potential to cause some volatility in the supply of new vehicles, it has an encouraging level of orders of new cars for the important new registration month of September.

And the group confirmed it is on course to meet market expectations for the full year.

Chief executive Andy Bruce said: “I am pleased with our performance over the first half of the year, which has been delivered despite ongoing challenging market conditions.

“Although profits, excluding a profit of £7.6m on the sale of a property, are down on last year, as expected, this was due to a very strong comparative period, driven by record new car sales ahead of the decline seen across the market from April 2017.”

He said: “Against this backdrop, we continue to show good strategic momentum, winning market share and outperforming the wider industry, demonstrating the benefits of our clear strategy of having the right brands in the right locations, with a well-invested dealership portfolio combined with excellent execution.

“We are also benefiting from our scale and our diversified business model which has resulted in revenue and gross profit growth across both used cars and aftersales.”

He added: “Looking forward, we have an encouraging level of orders for the important month of September.

“Whilst the new car market has seen further reductions in 2018, the decrease appears to have stabilised and volumes remain at a historically high level.

“Based on our first half performance we expect to meet market expectations for the full year.”