Lookers PLC Quarter One Trading Update (7763E)
11 May 2017 - 4:00PM
UK Regulatory
TIDMLOOK
RNS Number : 7763E
Lookers PLC
11 May 2017
11 May 2017
LOOKERS plc
QUARTER ONE - TRADING UPDATE
Strong performance and continued improvements across the
business
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 quarter ended 31 March 2017.
The Company produced a positive trading performance, ahead of
the prior year, with a strong result during the important month of
March.
Highlights
-- 17% increase in gross profit on new cars
and 9% on a like-for-like basis:
- Overall UK new car market volume up 6.2%;
- Total Lookers new car volumes up 7.4%;
- Retail sales volumes up 9.2% on a like-for-like
basis; and
- Fleet sales volumes up 5.1% on a like-for-like
basis.
-- 23% increase in gross profit on used cars
and 17% on a like-for-like basis:
- Higher volumes of leads generated by the
Group's website.
-- 18% increase in gross profit on aftersales,
and 9% on a like-for-like basis:
- Turnover up 17% and 8% on a like-for-like
basis
-- Strong balance sheet, available for use
on strategic acquisitions:
- Net debt to EBITDA ratio has improved
year-on-year; and
- Strengthened further by operational cash
flow
-- Performing in line with management expectations.
New car market
The UK new car market increased by 6.2% to 820,016 cars in the
first quarter of this year, with the new car retail market
increasing by 3.6% and the fleet market increasing by 8.7%. Our
total new car volume increased by 7.4% compared to last year, with
a strong retail performance up 9.2% and fleet up 5.1% on a
like-for-like basis.
Total gross profit from new cars increased by 17%, or 9% on a
like for like basis and margins, in terms of profit per unit for
both new retail and fleet cars were higher than for the prior year.
Some of the increase in the new car market is likely be a result of
the increase in Vehicle Excise Duty from 1 April 2017, which will
have had the effect of potentially bringing forward sales from
April to March and this appears to be confirmed by the April new
car registrations. However, it is not possible to estimate the
impact of this on volumes until we have seen the full impact during
the second quarter.
Used car market
The UK used car market continues to be buoyant and used cars
represent an important and successful part of our business, with
turnover increasing by 30% or 18% on a like-for-like basis.
Gross profit from used cars increased during the period and
margins also improved, resulting in an increase in gross profit of
23% compared to the prior year and 17% on a like-for-like basis.
Our used car volumes continue to benefit from higher volumes of
leads generated by the group's website. To maintain this momentum,
we are making further major developments to our website, with a new
version to be launched later this year. This will include exciting
improvements to the user experience and enhance functionality. Our
aim is to produce an industry-leading website to improve the
customer experience, increase sales, and develop operational
efficiencies further.
Aftersales
Our higher margin aftersales business performed well in the
period with turnover increasing by 17%, and 8% on a like-for-like
basis. Gross profit increased by 18%, or 9% on a like-for-like
basis and margins also increased in the period. The increase in
volumes and margins continues to benefit from initiatives made in
recent years to develop the aftersales business. We also continue
to invest in new technology and the multi-channel customer
experience to further strengthen the aftersales business.
Outlook
The group has made a pleasing start to the year with a positive
result for the first quarter. We have a strong balance sheet where
the level of net debt to EBITDA has improved compared to the prior
year and which continues to be strengthened by operational cash
flow. We also have substantial headroom in our bank facilities
which provides financial security as well as significant additional
funding capacity to help develop the business through further
strategic acquisitions.
The financial performance of the group in the three month period
builds on what was already a strong comparative in the previous
year. On the basis of the first quarter we continue to believe that
the results for the year ending 31 December 2017 should be in line
with management's current expectations.
Enquiries
Lookers
Andy Bruce, Chief Executive Officer Tel: 0161 291 0043
Robin Gregson, Chief Financial Officer
Bell Pottinger Tel: 020 3772 2500
Victoria Geoghegan
Nick Lambert
Zara de Belder
Notes to Editors
About Lookers plc
Lookers plc (LOOK.LN) is a leading UK motor retail and
aftersales service group. The Group's operations cover all four UK
countries and the Republic of Ireland where it operates through the
sale of new and used cars and aftersales services.
Since its foundation in 1908, the Group has grown organically
and through acquisitions to its current position of 153 franchise
dealerships. As a whole, the Group offers an extensive choice of
new and used cars, motorcycles, commercial vehicles and leasing
services as well as aftersales services. Through its "For You, For
Life" programme, the Group is committed to providing unrivalled
service, offering advice, support and expertise from purchase to
after sales care.
This information is provided by RNS
The company news service from the London Stock Exchange
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