Lookers PLC Trading Update (0356O)
15 May 2018 - 4:00PM
UK Regulatory
TIDMLOOK
RNS Number : 0356O
Lookers PLC
15 May 2018
15 May 2018
LOOKERS plc
TRADING UPDATE
Outperformance in new car market and continued momentum in used
and aftersales
Lookers plc, ("Lookers" or "the group"), one of the leading UK
motor retail and aftersales service groups, issues a trading update
for its first quarter, covering the three months ended 31 March
2018 ("the period").
Overall, trading performance in the quarter was positive with a
strong result during the important month of March.
New car market
The new car market represents 33% of gross profit for the group.
Whilst new car registrations reduced by 12.4% to 718,489 cars in
the first quarter, industry forecasts by The Society of Motor
Manufacturers & Traders (SMMT) for the full year are now at
2.4m. Whilst this is a reduction of 5.6% compared to last year, it
remains a very high level of registrations compared to historical
levels.
Against this background, the group has produced resilient
results in the three months to 31 March:
-- Turnover of new cars decreased by 4%, significantly better
than the total market reduction of 12%, and against very strong
comparatives;
-- Total gross profit from new cars reduced by 8% with a modest reduction in profit per unit.
The comparative period of 2017 was particularly strong due to
the changes in Vehicle Excise Duty on 1 April of that year, which
significantly increased volumes in the first quarter.
Used car market
The used car market continues to be buoyant and values of used
cars have remained stable in this period. Used cars now contribute
26% of total gross profit.
In this market, the group produced the following results in the
period:
-- Turnover of used cars increased by 8%;
-- Gross profit from used cars improved during the period with a
small increase in profit per unit, resulting in an increase of 6%
compared to the prior year.
Aftersales
Our higher margin aftersales business, which represents 41% of
total gross profit, has performed well in the period and has
seen:
-- Turnover of aftersales was slightly higher than the prior year;
-- Gross profit increased by 2% at a higher margin.
Cash flow
During the period we sold two properties under sale and
leaseback contracts with sale proceeds of GBP30m. This has had a
positive and beneficial impact on cash flow in the period as well
as helping to fund our capital expenditure programme.
Summary and Outlook
The group has produced a positive financial performance for the
first quarter of the year, against very strong prior year
comparatives for the new car market and in an ongoing environment
of subdued consumer confidence. There continues to be strong
momentum in both our used car and aftersales businesses,
demonstrating the resilience and diversity of the group's business
model.
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.
The financial performance of the group in the period
demonstrates the effectiveness of our strategy of having the right
brands in the right locations. The trading performance since March
has been encouraging and we expect to make further positive
progress during the year.
ENDS
Enquiries
Lookers Tel: 0161 291 0043
Andy Bruce, Chief Executive
Robin Gregson, Chief Financial Officer
MHP Communications Tel: 0203 128 8100
Tim Rowntree Email: Lookers@mhpc.com
Simon Hockridge
This information is provided by RNS
The company news service from the London Stock Exchange
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