Lookers defies car market gloom
CAR parts and sales group Lookers said not even the worst market conditions for new car sales since 1994 could put a brake on profits.
The group, whose parts division is based in Sheffield, said it had defied the challeging market place – the UK new car market fell by 4.4% in 2011, with total registrations of 1.94 million – to grow its market share, revenue and profits.
Revenue for 2011 nudged forward from £1.88bn to £1.9bn while profits followed a similar track, rising from £31.1m to £31.4m. The group also managed to pay down debt, ending the year with net debt of £39.5m, compared with £56.6m.
Chief executive Peter Jones said: “We have had three successive years of increased profits, which have been delivered in difficult market circumstances.
“Operating cash flow continues to be strong and this has further strengthened our balance sheet. These results give us confidence that we can continue to grow the business in 2012, despite short term market conditions remaining challenging.
“As economic conditions improve over the medium term, the business is well placed to take advantage from future growth in the new and used car markets and increased demand for aftersales and parts.”
Despite the fall in the new car market, Lookers said it had grown its market share to 4.1% with new car sales volumes up 1.1%. Used car sales volumes up 2.5% against a flat UK market.
Lookers’ motor division consists of 111 franchise dealerships representing 31 marques from 70 sites. Profits were £27.4m, similar to the 2010 level.
In the Yorkshire-based parts business, turnover increased by 6%, despite economic pressures and a reduction in miles driven by UK consumers, which directly reduces the demand for vehicle parts. Operating profit and profit before tax were maintained at a similar level to 2010 at £12.4m.
Chairman Phil White said the parts division had seen a “decline in demand” at the start of this year which has affected turnover, but said investment in the business including the addition of new product lines should help offset the decline.
Looking ahead, he added: “The new financial year has started well with the group continuing to make further progress. We are therefore confident that we are well placed to deliver future growth.”
He added that having refinanced last year, and also cut net debt, the group has “significant headroom” for acquisition opportunities in the parts and motor divisions.
