Lookers PLC Half Year Trading Update (3053F)
July 12 2019 - 2:00AM
UK Regulatory
TIDMLOOK
RNS Number : 3053F
Lookers PLC
12 July 2019
12 July 2019
LOOKERS plc
Half Year Trading Update
Lookers plc, ("Lookers" or "the Group"), one of the leading UK
motor retail and aftersales service groups, today provides the
following pre-close trading update ahead of the publication of its
half year results for the six months ended 30 June 2019 ("H1") on
14 August 2019.
H1 Performance
As reported in our AGM statement, trading for the three months
ended 31 March 2019 ("Q1") was positive, underpinned by
outperformance of the UK new car market and growth in both turnover
and gross profit in used vehicles and aftersales.
Whilst the period began satisfactorily, trading during the three
months ended 30 June 2019 ("Q2"), against strong comparatives, has
proved increasingly more challenging. During Q2 the UK new car
market continued to decline with registrations down -4.6% (Q1:
-2.4%) versus the comparable period last year. In addition, weaker
demand and the resulting margin pressure in the used car market has
significantly increased, notably during the month of June in which
we took a disciplined approach to managing stock.
Throughout H1 and in line with general retail sector trends the
Group has continued to experience cost inflation pressures.
As a result, underlying profit before tax for H1 is expected to
be approximately GBP32m* compared to GBP43m* in the comparable
period last year.
*Underlying PBT before the proposed reclassification of
amortisation on intangible assets.
Review of Regulated Activities
As announced on 25 June 2019, the Group has been informed by the
FCA that it intends to carry out an investigation into sales
processes between the period of 1 January 2016 to 13 June 2019. The
Group continues to co-operate fully with the investigation and will
provide a further update at the Interims on the level of investment
required to support our improvement plan and other costs associated
with this process.
Balance Sheet
The Group's balance sheet remains strong. In December 2018 the
Group agreed a new, fully committed GBP250m revolving credit
facility with a term to March 2022. At 31 December 2018 the Group
had net assets of GBP399m, including freehold and long leasehold
property of GBP309m at net book value.
Outlook
Notwithstanding the more challenging market conditions in H1,
particularly in Q2, the Group has delivered a robust financial
performance underpinned by maintaining its strategy of strong
operational execution and focus on the right brands in the right
locations.
The Board now expects that the more recent challenging
conditions are likely to continue into H2, exacerbated by continued
weakness in consumer confidence in light of wider political and
economic uncertainty, and further pressure on used car margins.
There is also the possibility of new vehicle supply restrictions as
new emissions regulations come into force during Q3. In addition,
the retail sector cost inflation experienced in H1 is likely to
continue to impact earnings during the second half of the year.
As a result of the above factors, the Board's current outlook
for underlying profit before tax for the full year is now below its
previous expectations.
Notwithstanding these short-term challenges, the Board continues
to believe that over the long term the Group is extremely well
positioned to take advantage of the many opportunities ahead as the
sector continues to develop, underpinned by the Group's strong
balance sheet and cash generation.
Notice of Results
The Group intends to report its Half Year results on 14 August
2019.
ENDS
Enquiries
Lookers Tel: 0161 291 0043
Andy Bruce, Chief Executive Officer
Robin Gregson, Chief Financial Officer
MHP Communications Tel: 0203 128 8742
Tim Rowntree Email: Lookers@mhpc.com
Simon Hockridge
Alistair de Kare-Silver
This announcement contains inside information for the purposes
of article 7 of the Market Abuse Regulation (EU) No 596/2014
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END
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