Lookers profits still racing ahead

LOOKERS, the listed car sales, service and parts distribution company, continues to out-perform the market and City expectation with its latest half year results.

Phil White, chairman of the Manchester-based group said the “excellent” record results for the six months to the end of June leave Lookers on track to exceed market forecasts for the full year.

Profits in the period surged 38% to £37.7m as revenues rose 29% to £1.6bn. In line with such strong performance, the interim dividend was raised 10% to 0.97p.

Lookers said new car sales were particularly strong. While the retail market was up 12%, its new car sales at its 127 franchised dealerships were 15% ahead.

In what was also record interim result for the motor division, profits rose 43%, to £37.5m. Lookers said it had added seven businesses since the start of the year with the acquisition of Colborne, which operates three Audi, one Bentley, one Skoda, two Volkswagen passenger car and one Volkswagen commercial vehicle dealership in the South East.

Chief executive Andy Bruce said: “We have delivered a strong trading performance in the first half of the year which is another record result and represents six successive years of profit improvement. Both the motor and parts divisions have produced excellent results.

“Operational cash flow for the period was particularly positive, strengthening the balance sheet further. Lookers is well placed to take advantage of further growth opportunities in the new and used car markets and increased demand for aftersales and parts. This gives us confidence that we can continue to grow the business and deliver improved results for the full year.”

 While reporting strong results in all parts of the group, Lookers said its Sheffield-based  independent parts distribution business had made “good progress” in the period in an improving, but competitive market place with increases in both turnover and profits.

The company said it has significant financial muscle to make acquisitions – it renewed and increased its bank facilities in February.  Its funding consists of a term loan of £46.25m and a revolving credit facility of £90m, giving total facilities of £136.25m. There is also the potential to increase the term loan by an additional £30m to fund future acquisitions.

Chairman Phil White said Lookers was looking at selective acquisitions for both the motor and parts divisions.

Looking ahead he said: “The excellent performance of the group in the first half of the year represents a further significant improvement in the financial performance of the company and builds on what was already a strong performance in the previous year.

“This, together with the broad base of our franchise representation, the aftersales bias to the business and further recovery in the UK new car market, create a positive environment for future growth and the board are confident that the group should make further progress during the rest of this year with a result for the year which should exceed current market expectations.”