Lookers PLC Trading Update (9839V)
November 09 2017 - 2:00AM
UK Regulatory
TIDMLOOK
RNS Number : 9839V
Lookers PLC
09 November 2017
9 November 2017
LOOKERS plc
TRADING UPDATE
Positive trading in Q3, and on track for the full year
Lookers plc, ("Lookers", "the company" or "the group"), one of
the leading UK motor retail and aftersales service groups, issues
its trading update for the period ended 30 September 2017.
The company produced a positive trading performance in the third
quarter, with a solid result during the important month of
September.
New car market
The new car market represents 35% of gross profit for the group.
After a strong start to the year, the UK new car market has
decreased since April and by the end of September, total UK
registrations had reduced by 3.9% compared to the prior year, with
a reduction in quarter three of 9%. Industry forecasts by The
Society of Motor Manufacturers & Traders (SMMT) for the full
year are now at 2.57m, a reduction of 4.7% compared to last year,
although this remains historically a very high level of
registrations. We are pleased to report that our key manufacturer
partners recognise the more difficult trading environment and are
taking pragmatic and supportive actions such as reducing targets,
increasing tactical incentives and helping us to reduce operating
costs which will offset the effect of lower new car volumes going
forward.
Against this background, the group has produced encouraging
results in the nine months to 30 September:
-- Turnover of new cars increased by 10% (5% on a like for like basis);
-- Total gross profit from new cars increased by 15% (6% on a like for like basis);
-- New car margins and profit per unit for both new retail and
fleet cars were higher than the prior year.
Used car market
The used car market continues to be buoyant and values of used
cars have remained stable in this period. Used cars contribute 25%
of total gross profit and are an important and successful part of
our business.
In this market, the group produced the following results in the
nine months to 30 September:
-- Turnover of used cars has increased by 24% (14% on a like for like basis);
-- Gross profit from used cars increased during the period with
improved margins, resulting in an increase in gross profit of 20%
compared to the prior year (12% on a like for like basis);
-- The group's used car volumes continue to benefit from higher
volumes of leads generated by the group's website;
-- Further improvements are expected with the launch of our new
website at the start of next year to achieve improved
functionality, customer experience and interaction with our
customers.
Aftersales
Our higher margin aftersales business, which represents 40% of
total gross profit, has performed well in the period and during the
nine months to 30 September has seen:
-- Turnover of aftersales up by 11% (4% on a like for like basis);
-- Gross profit up by 15% (6% on a like-for-like basis) at better margin;
-- Increased profitability, benefiting from the growth in the
vehicle parc of cars under three years old and the initiatives we
have made to enhance financial performance from aftersales.
Summary and Outlook
The group has had a positive financial performance for the first
nine months of the year, against strong prior year comparatives. We
have a strong balance sheet which continues to be supported by
operational cash flow and our level of net debt to EBITDA has
improved. We also have substantial headroom in our bank facilities
which gives us flexibility and capacity to develop the business
through further acquisitions at a time when there are significant
consolidation opportunities within the sector.
In light of the softening in the new car market since April, as
various factors impact on consumer confidence, we continue to plan
prudently for the business. However, based on the progress seen in
the year to date, the board is confident that the group will make
further progress during the remainder of this year and believes
that the results for the year ending 31 December 2017 will be in
line with management's current expectations.
Share buyback
We will be announcing a share buyback programme as this provides
sensible returns at the current share price. The buyback will be
subject to certain pricing, liquidity and quantum parameters, one
of which will be that shares will only be bought back below a
pre-determined share price level.
ENDS
Enquiries
Lookers Tel: 0161 291 0043
Andy Bruce, Chief Executive
Robin Gregson, Chief Financial Officer
MHP Communications Tel: 0203 128 8742
Tim Rowntree Email: Lookers@mhpc.com
Simon Hockridge
This information is provided by RNS
The company news service from the London Stock Exchange
END
TSTVVLFBDFFXFBD
(END) Dow Jones Newswires
November 09, 2017 02:00 ET (07:00 GMT)
Lookers (LSE:LOOK)
Historical Stock Chart
From Apr 2024 to May 2024
Lookers (LSE:LOOK)
Historical Stock Chart
From May 2023 to May 2024