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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Lookers Plc | LSE:LOOK | London | Ordinary Share | GB00B17MMZ46 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 129.80 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMLOOK
RNS Number : 0951O
Lookers PLC
16 August 2017
16 August 2017
LOOKERS plc
Unaudited Results for the six months ended 30 June 2017
Strong financials driving investment in the multi-channel customer experience
Lookers plc, ("Lookers", "the company" or "the group"), one of the leading UK motor retail and aftersales service groups, announces its results for the six months ended 30 June 2017.
Financial highlights:
Hot Features
Premium
-- Revenue increased 5% to GBP2.46 billion (2016: GBP2.34 billion)
with growth from new and used cars, as well as aftersales
-- *Operating profit from continuing operations increased 13%
to GBP58.1 million (2016: GBP51.6 million)
-- *Adjusted profit before tax from continuing operations increased
18% to GBP50.2 million (2016: GBP42.6 million)
-- Profit before tax from continuing operations increased by
14% to GBP44.6 million (2016: GBP39.2 million)
-- Profit before tax of GBP44.6 million (2016: GBP46.7 million)
-- Earnings per share from continuing operations up 15% at
9.07p (2016: 7.90p)
-- Increase in interim dividend of 10% to 1.41p per share (2016:
1.28p)
-- Net debt reduced to GBP61.9 million (31 December 2016: GBP74.1
million)
(*Adjusted operating profit is operating profit before amortisation of intangible assets and share based payments. Adjusted profit before tax is profit before amortisation, debt issue costs, pension costs and share based payments)
Operational highlights:
-- Continued investment in our multi-channel customer experience,
especially the website, driving significant increases in
visitor and enquiry levels
-- New website to be launched by the end of this year to further
enhance operational efficiencies
-- Strengthened portfolio of franchise representation
-- Growth in new car market in recent years underpins continued
demand for aftersales, as the number of cars under three
years old continues to rise
-- A healthy order book for the delivery of new cars in September
Andy Bruce, Chief Executive of Lookers, said:
"I am pleased to announce an excellent set of results for the first half of the year with growth across all areas of the business. We continue to produce record levels of profit which is evidence of the success of our expansive and resilient business model.
We have made good progress with our strategy of having the right brands in the right locations with excellent execution and have managed our portfolio of dealerships to reflect that. Our order book for new cars for the important month of September is continuing to build in line with our expectations and the new car market for this year is still forecast to be at a historically high level. We therefore believe that the company is well positioned to continue its strong performance and deliver sustainable value to shareholders."
If you would like to attend the analyst briefing today at 9.30am please contact: lookers@bellpottinger.com
Alternatively, details of the conference call at the same time are:
United Kingdom (Local): 020 3059 8125
All other locations: + 44 20 3059 8125
Participant Access Code: Lookers plc Interim Results
Enquiries:
Lookers Today: 020 3772 2500 Andy Bruce, Chief Executive Thereafter: 0161 291 0043 Robin Gregson, Chief Financial Officer Bell Pottinger Today: 020 3772 2500 Dan de Belder Thereafter: 0161 291 0043 Zara de Belder
INTRODUCTION
I am very pleased to report another excellent trading performance, with an increase of 18% in *adjusted profit before tax from continuing operations of GBP50.2 million (2016: GBP42.6 million). This positive performance has been achieved despite the UK new car market reducing by 1.3% compared to the previous year. This is the first reporting period following the successful integration of the significant acquisitions made during the second half of 2016 and the sale of our parts division in November 2016. The relative performance of continuing operations will be considered in this report and will provide a more appropriate assessment of performance, as well as that of the company as a whole, where the comparatives and relative changes include the parts division. Any references to continuing operations in this report exclude the parts division from the 2016 comparatives.
FINANCIAL REVIEW
Turnover increased by 5% to GBP2.46 billion (2016: GBP2.34 billion) with turnover on continuing operations increasing by 10% (2016: GBP2.23 billion), including growth from new and used cars as well as aftersales. Gross profit increased by 3% to GBP264 million (2016: GBP257 million) with gross profit from continuing operations increasing by 17% (2016: GBP225 million). *Adjusted profit from operations decreased slightly by 2% to GBP58.1 million (2016: GBP59.1 million). However, *adjusted profit from continuing operations increased by 13% (2016: GBP51.6 million). Interest costs reduced in the period to GBP7.9 million (2016: GBP9.0 million), due to lower levels of debt.
*Adjusted profit before tax was slightly higher than the prior year in total at GBP50.2 million (2016: GBP50.1 million). However, *adjusted profit before tax from continuing operations increased by 18% (2016: GBP42.6 million). Profit before tax on continuing operations of GBP44.6 million increased by 14% (2016: GBP39.2 million). Earnings per share were 9.07p compared to 9.44p, with earnings per share from continuing operations increasing by 15% (2016: 7.90p). Profit after tax reduced by 4% to GBP36.0 million (2016: GBP37.4 million) after a tax charge of GBP8.6 million, which is an effective tax rate of 19%. Profit after tax on continuing operations increased by 15%.
The group produced strong operational cash flow in the period with cash generated from operations of GBP66.5 million (2016: GBP107.8 million). The reduction compared to the prior year was due to last year having a release of working capital from the opening balance sheet which had relatively higher levels of stock and debtors at 31 December 2015.
As planned and previously announced, we have invested GBP19.7 million of capital expenditure during the period in improving dealership facilities as part of our ongoing capital investment programme. We also received GBP3.0 million for the sale of surplus properties which was significantly lower than the prior year when cash flow was greatly improved by the receipt of GBP18.1 million from the sale of the Battersea property. Net cash inflow for the period was GBP6.8 million compared to GBP82.3 million last year, due to a neutral working capital situation rather than the reduction seen in the prior year and with no exceptional proceeds from the sale of assets. Net debt reduced to GBP61.9 million compared to GBP74.1 million at the start of the year and GBP74.9 million at 30 June 2016. When comparing net debt at June 2017 with June 2016 it is important to note that the comparative is before we acquired the Knights BMW business in August 2016, which added GBP13 million to net debt in terms of new property loans.
With the reduction in net debt in the period, the group continues to benefit from a strong balance sheet that supports further investment in new and improved facilities and operational capabilities. The ratio of net debt to EBITDA has reduced from 0.65 at the start of the year to the current level of 0.54 and gearing has also reduced to 17% compared to 22% at the start of the year. The value of freehold and long leasehold properties of GBP295 million (2016: GBP236 million) at the end of the period remains a key strength of the business.
Our group bank facilities consist of a term loan of GBP80 million and a revolving credit facility of GBP150 million, giving total facilities of GBP230 million, which were renewed at the time of the Benfield acquisition in 2015. There is also the potential to increase the term loan by an additional GBP30 million to fund future acquisitions. As net debt at 30 June 2017 was GBP61.9 million, the group has a significant level of unutilised bank facilities of GBP168 million. The extent and term of the facilities, which are renewable in March 2020, continue to provide significant financial security for the group.
*Adjusted profit is profit before amortisation of intangible assets, debt issue costs, pension costs and share based payments
DIVID
I am pleased to announce that, given the encouraging results and strong financial position of the group, the Board is declaring an increase in the interim dividend of 10%. This follows the 17% increase in the total dividend last year and an increase in the dividend of over 100% since 2010, continuing our policy of increasing the dividend provided there is satisfactory growth in profitability.
The increase in the interim dividend recognises that the dividend cover has risen significantly due to the increase in profits of recent years. The Board maintains its view that the level of cover should reduce over the medium term to a level of between 3.5 and 4.0 times. However, the dividend policy will continue to be reviewed in the light of the company's trading performance whilst retaining sufficient cash flow to fund future expansion in terms of both organic growth and acquisitions. The interim dividend of 1.41p per share (2016: 1.28p) will be payable to shareholders on 24 November 2017.
OPERATING REVIEW
The continuing operations of the business increased turnover by GBP233 million to GBP2.46 billion (2016: GBP2.23 billion), an increase of 10%. *Adjusted profit before tax increased to GBP50.2 million (2016: GBP42.6 million), an increase of 18%. This result demonstrates a significant achievement and strong performance against our objectives/KPIs. The key drivers of our performance were:
-- A positive increase in new car revenue and gross profit; -- Significant growth in used car revenue and gross profit and; -- Substantial increase in revenue and gross profit for aftersales.
Our motor retail group consists of 155 franchised dealerships representing 32 manufacturers from 100 locations. The business generates revenue from the sale of new and used cars and aftersales activities. The high margin aftersales sector of the business represents the largest proportion of gross profit at 41%, with new cars and used cars contributing 33% and 26% respectively.
Over the past six years, between 2.1 million and 2.69 million new cars have been sold per annum in the UK and the new car market continues to perform at near-record levels where our share of the retail sector of this market is 5.5%. We also continue to see significant opportunity to grow market share and increase sales volumes within the UK used car market, which currently has annual transactions of approximately 8 million vehicles, of which franchised dealers represent approximately 50%.
Aftersales represents the servicing, repair and sale of franchised parts to customers' vehicles. The aftersales market applies to the overall number of cars in use on UK roads, which is referred to as the UK car parc. There are approximately 34 million vehicles with 22% (7.5 million) under three years old, which is contributing to the continued growth of the aftersales market. This is the predominant market for franchised motor dealers and we are focused on developing the aftersales business and investing in our offering through initiatives to increase volumes and margins.
The internet remains the primary means for our customers to research and determine which new or used cars they are interested in buying. We are committed to ongoing investment in our digital marketing channels and developing the website, as part of our omni-channel customer experience strategy to meet the needs of our growing customer base.
Our motor retail business has recently been through a period of significant transformation. In the second half of 2016, we completed the strategically important acquisitions of the Knights BMW and MINI dealerships as well as the Drayton Mercedes-Benz dealerships, both of which were major transactions for the company. These acquisitions have now been successfully integrated and are making a positive contribution to the company's profits.
We also carried out a strategic review of our brand representation during the previous year. As part of this review, we decided to relinquish some of our franchise representation of dealerships to ensure that all our dealerships were aligned with our strategy of having a meaningful representation of the major automotive brands in the larger areas of population in the UK to generate profits. Whilst we completed most of this reorganisation last year, the majority of it has now been completed with the closure or sale of two of the remaining businesses. In the last eighteen months we have sold or closed fifteen businesses which, together with the two major acquisitions, has significantly improved and strengthened our portfolio of franchise representation.
New Cars
After a record year of 2.69 million cars registered in 2016, the UK new car market declined slightly by 1.3% to 1.40 million cars in the first half, with the retail new car market reducing by 4.8% and the fleet market increasing by 1.6%. Our total new car turnover increased by 10%, or 7% on a like-for-like basis.
We have continued to put more focus and investment into the fleet sector focusing on the quality, higher margin sales. This has resulted in increased fleet turnover, including commercial vehicles, of 7%, or 5% on a like-for-like basis, compared to the market growth of 1.6%. The fleet sector is a significant part of the market which represents a major profit opportunity providing scope for organic growth given our lower market share of this market compared to the retail market.
Gross profit from new cars increased by 16%, or 7% on a like-for-like basis, compared to the prior year. New car market conditions were more favourable during the first quarter of the year with growth of 6.2%, where demand was increased by forthcoming changes in vehicle excise duty which became effective from 1 April. This factor had the opposite effect in the second quarter where there was a reduction in the new car market. The uncertain political climate and general election will have also adversely affected demand in the second quarter and our performance can therefore be viewed as positive against this background.
Our view of the new car market at the start of the year was that it was likely to be in line with 2016 levels. However, given the market performance in the second quarter, we believe that the current industry forecasts of a decline of 2.6%, which would still be a very high level of 2.6 million registrations, are a reasonable estimate at this time. Notwithstanding these forecasts we will continue to target increases in new car volumes and our order take for the important month of September is continuing at satisfactory levels.
Used Cars
Group turnover of used cars increased by 10%, or 7% on a like-for-like basis compared to 2016. Gross profit increased by 23% or 13% on a like-for-like basis. This is a positive performance given that our used car volumes have increased significantly in each of the last five years. We continue to focus on stock management and sourcing good quality used cars, both of which help to improve profitability.
The used car market still represents a significant opportunity for the group and this will benefit from the increasing number of leads generated by our website, which have increased by 23% compared to last year. A new and much improved website was launched two years ago and whilst this has resulted in significant increases in our visitor and enquiry levels, further development is required.
As a result, we are continuing to make further major developments to our website, with the aim of launching a new industry-leading platform later this year. This will result in exciting improvements to functionality, customer experience and interaction with our customers and ultimately drive higher sales leading to increased profitability.
Aftersales
As well as improving the margin, our higher margin aftersales business increased turnover by 14% compared to 2016 and 4% on a like-for-like basis. Gross profit increased by 16% or 7% on a like-for-like basis, with the margin increased compared to last year. The increased profitability has benefitted from the growth in the vehicle parc of cars under three years old, a trend which will continue due to increased sales of new cars in recent years. The increase in volumes and margin are also due to the initiatives we have made to develop the aftersales business, with an increased emphasis on performance and specific targets being introduced to improve profitability. We continue to have great success in improving penetration of an increasing proportion of customers who choose to enter into service contracts, which improves customer loyalty and retention.
We have also developed further initiatives to improve the aftersales business, particularly in relation to technology and systems. In this area, we are focussed on improving the customer experience to increase retention levels.
BOARD CHANGES
I am very pleased to report that Stuart Counsell joined the Board as a non-executive director on 29 June 2017 and together with all my colleagues on the Board I would like to welcome him to Lookers.
Stuart had a long and successful career with Deloitte where he spent over 30 years, during which time he held a variety of senior management positions including Managing Partner of the 17 UK regional offices and Deputy to the Chief Executive. Stuart has significant financial expertise in one of the leading accounting and professional services businesses in the UK. His knowledge and experience will be of great benefit to Lookers, particularly in his role as chairman of the audit and risk committee and I believe he will make a valuable contribution to the continued development of the company.
OUTLOOK
Our strategy of having the right brands in the right locations with excellent execution leaves us ideally placed to continue our growth of the last eight years. The group has produced excellent results for the first six months of the year, with growth in all areas of our business. Increased new car volumes have resulted in a further increase in new car gross profit and we have a satisfactory level of orders for the delivery of new cars in the important month of September. Whilst the new car market is expected to reduce slightly, it is forecast to remain at a historically high level. We have also benefitted from further increases in used car volumes, growing our share of this market, as well as improving margins. The vehicle parc of cars less than three years old will see further increases which will provide opportunities to continue to increase turnover in our high margin aftersales business.
The company has achieved and maintained strong growth in recent years and we continue to make a significant investment to upgrade our facilities and enhance our multi-channel customer experience. We believe this gives us a competitive advantage to strengthen our position as a leading UK automotive retail and aftersales service group which leaves us very well positioned for future growth over the medium to long term.
We have a strong balance sheet which continues to be strengthened by operational cash flow and the level of net debt to EBITDA has improved compared to the prior year. 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 at a time when there are significant consolidation opportunities within the sector.
The excellent performance of the group in the first half of the year builds on what was already a strong comparative for the previous year. However, we have seen a softening in the new car market in recent months. Furthermore, the current political environment, Brexit and weaker exchange rates have created a degree of uncertainty in the UK economy, which is unhelpful and we therefore view the second half of the year with some caution. However, based on the first half performance, the board believes that the results for the year ending 31 December 2017 should be in line with management's current expectations.
Finally, I would like to thank all my colleagues at Lookers for their hard work, commitment and dedication to the company and without whom we would not have been able to deliver another excellent result for the period.
Phil White
Chairman
16 August 2017
Condensed Consolidated Statement of Financial Performance
Six months ended 30 June 2017
Unaudited Continuing Discontinued Unaudited Continuing Discontinued Audited
Six months operations Operations Six months operations operations Year
ended ended ended
30 June 30 June 31 Dec
2017 2016 2016
Note GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------- ----- ----------- ----------- ------------- ----------- ------------ ------------- ----------
Continuing
operations
Revenue 3 2,458.5 2,225.3 115.2 2,340.5 4,088.2 193.5 4,281.7
Cost of sales (2,194.7) (2,000.6) (82.8) (2,083.4) (3,638.7) (138.8) (3,777.5)
---------------- ----- ----------- ----------- ------------- ----------- ------------ ------------- ----------
Gross profit 263.8 224.7 32.4 257.1 449.5 54.7 504.2
Distribution
costs (146.1) (130.0) (16.5) (146.5) (254.5) (27.8) (282.3)
Administration
expenses (63.8) (45.2) (8.4) (53.6) (94.2) (14.7) (108.9)
Other operating
income 0.5 0.2 - 0.2 0.5 - 0.5
---------------- ----- ----------- ----------- ------------- ----------- ------------ ------------- ----------
Profit from
operations 54.4 49.7 7.5 57.2 101.3 12.2 113.5
Profit from
operations
before
amortisation,
impairment of
goodwill
, exceptional
items
and share
based payments 58.1 51.6 7.5 59.1 82.5 12.2 94.7
Amortisation of
intangible
assets (2.8) (1.0) - (1.0) (1.7) - (1.7)
Impairment of
goodwill - - - - (1.0) - (1.0)
Exceptional
items - - - - 23.3 - 23.3
Share based
payments (0.9) (0.9) - (0.9) (1.8) - (1.8)
Profit from
operations 54.4 49.7 7.5 57.2 101.3 12.2 113.5
Interest
payable 5 (7.9) (9.1) - (9.1) (17.6) - (17.6)
Interest
receivable 5 - 0.1 - 0.1 - - -
---------------- ----- ----------- ----------- ------------- ----------- ------------ ------------- ----------
Net interest (7.9) (9.0) - (9.0) (17.6) - (17.6)
Net interest
and costs
on pension
scheme
obligation (1.7) (1.3) - (1.3) (3.7) - (3.7)
Debt issue
costs (0.2) (0.2) - (0.2) (0.4) - (0.4)
Profit on
ordinary
activities
before
taxation 44.6 39.2 7.5 46.7 79.6 12.2 91.8
Profit before
tax,
amortisation,
debt
issue costs,
impairment
of goodwill,
exceptional
items,
pensions costs
and share
based payments 50.2 42.6 7.5 50.1 64.9 12.2 77.1
Amortisation of
intangible
assets (2.8) (1.0) - (1.0) (1.7) - (1.7)
Share based
payments (0.9) (0.9) - (0.9) (1.8) - (1.8)
Impairment of
goodwill - - - - (1.0) - (1.0)
Exceptional
items - - - - 23.3 - 23.3
Net interest on
pension
scheme
obligation (1.7) (1.3) - (1.3) (3.7) - (3.7)
Debt issue
costs (0.2) (0.2) - (0.2) (0.4) - (0.4)
Profit on
ordinary
activities
before
taxation 44.6 39.2 7.5 46.7 79.6 12.2 91.8
Tax charge 7 (8.6) (7.9) (1.4) (9.3) (7.9) (2.6) (10.5)
---------------- ----- ----------- ----------- ------------- ----------- ------------ ------------- ----------
Profit for the
period/year 36.0 31.3 6.1 37.4 71.7 9.6 81.3
Attributable
to:
Shareholders of
the
company 36.0 - - 37.4 - - 81.3
Earnings per
share
Basic earnings
per
share 6 9.07p 9.44p 20.51p
Diluted
earnings per
share 6 8.73p 9.24p 20.10p
---------------- ----- ----------- ----------- ------------- ----------- ------------ ------------- ----------
Condensed Consolidated Statement of Comprehensive Income
Six months ended 30 June 2017
Unaudited Continuing Discontinued Unaudited Continuing Discontinued Audited
six months operations operations six months operations operations Year
ended ended ended
30 June 30 June 31 Dec
2017 2016 2016
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------- ------------ ------------ ------------- ------------ ------------ ------------- --------
Profit for the
period
/ year 36.0 31.3 6.1 37.4 71.7 9.6 81.3
-------------------- ------------ ------------ ------------- ------------ ------------ ------------- --------
Items that will
never
be reclassified to
profit and loss:
Actuarial
gains/(losses)
recognised in post
retirement benefit
schemes 1.1 (24.9) - (24.9) (27.2) - (27.2)
Movement in
deferred
taxation on
pension
liability (0.2) 4.3 - 4.3 4.1 - 4.1
Items that are or
may
be reclassified to
profit and loss:
Tax rate
adjustment - - - - (0.5) - (0.5)
Fair value on
derivative
instruments
and share based
payments - - - - (2.0) - (2.0)
Movement in
deferred
taxation on
derivative
instruments - - - - (0.8) - (0.8)
-------------------- ------------ ------------ ------------- ------------ ------------ ------------- --------
Other comprehensive
income/(expense)
for
the period/year 0.9 (20.6) - (20.6) (26.4) - (26.4)
-------------------- ------------ ------------ ------------- ------------ ------------ ------------- -------- Total comprehensive income for the period/year 36.9 10.7 6.1 16.8 45.3 9.6 54.9 -------------------- ------------ ------------ ------------- ------------ ------------ ------------- -------- Attributable to: Shareholders of the company 36.9 16.8 54.9 -------------------- ------------ ------------ ------------- ------------ ------------ ------------- --------
Condensed Consolidated Statement of Financial Position
As at 30 June 2017
Unaudited Unaudited Audited
30 June 30 June 31 Dec
2017 2016 2016
GBPm GBPm GBPm
----------------------------- ---------- ---------- --------
Non current assets
Goodwill 107.6 96.4 107.6
Intangible assets 113.6 64.0 109.8
Property, plant and
equipment 328.0 268.9 319.1
----------------------------- ---------- ---------- --------
549.2 429.3 536.5
----------------------------- ---------- ---------- --------
Current assets
Inventories 857.1 797.1 839.4
Trade and other receivables 320.4 330.0 225.0
Rental fleet vehicles 67.5 63.9` 67.1
Cash and cash equivalents 72.7 27.1 39.8
1,317.7 1,218.1 1,171.3
----------------------------- ---------- ---------- --------
Total assets 1,866.9 1,647.4 1,707.8
----------------------------- ---------- ---------- --------
Current liabilities
Bank loans and overdrafts 51.8 20.6 25.1
Trade and other payables 1,199.5 1,081.0 1,087.5
Current tax liabilities 14.4 17.6 14.7
Short term provisions - 0.6 -
Derivative financial
instruments 3.0 4.8 3.0
----------------------------- ---------- ---------- --------
1,268.7 1,124.6 1.130.3
----------------------------- ---------- ---------- --------
Net current assets 49.0 93.5 41.0
----------------------------- ---------- ---------- --------
Non current liabilities
Bank loans 82.8 81.4 88.8
Trade and other payables 35.0 34.6 33.6
Retirement benefit
obligations 75.3 77.8 78.4
Deferred tax liabilities 34.3 20.8 35.0
Long term provisions - 0.7 -
----------------------------- ---------- ---------- --------
227.4 215.3 235.8
----------------------------- ---------- ---------- --------
Total liabilities 1,496.1 1,339.9 1,366.1
----------------------------- ---------- ---------- --------
Net assets 370.8 307.5 341.7
----------------------------- ---------- ---------- --------
Shareholders' equity
Ordinary share capital 19.9 19.8 19.8
Share premium 78.4 77.8 77.7
Capital redemption
reserve 14.6 14.6 14.6
Retained earnings 257.9 195.3 229.6
----------------------------- ---------- ---------- --------
Total equity 370.8 307.5 341.7
----------------------------- ---------- ---------- --------
Condensed Consolidated Statement of Changes in Equity
Six months ended 30 June 2017
Share Share Capital Retained
capital premium redemption earnings
GBPm GBPm reserve GBPm Total
GBPm equity
GBPm
As at 1 January 2017 19.8 77.7 14.6 229.6 341.7
Profit for the period - - - 36.0 36.0
Actuarial gains recognised
on defined
benefit pension schemes - - - 1.1 1.1
Deferred taxation on pension
liability - - - (0.2) (0.2)
Share based payments - - - 0.9 0.9
New shares issued 0.1 0.7 - - 0.8
Dividend to shareholders - - - (9.5) (9.5)
As at 30 June 2017 (unaudited) 19.9 78.4 14.6 257.9 370.8
Six months ended 30 June 2016
Capital
Share Share redemption Retained Total
capital premium reserve earnings Equity
GBPm GBPm GBPm GBPm GBPm
As at 1 January 2016 19.8 77.7 14.6 185.7 297.8
Profit for the period - - - 37.4 37.4
Actuarial losses recognised on
defined
benefit pension schemes - - - (24.9) (24.9)
Share based payments - - - 0.9 0.9
New shares issued - 0.1 - - 0.1
Deferred taxation on pension
liability - - - 4.3 4.3
Dividend to shareholders - - - (8.1) (8.1)
As at 30 June 2016 (unaudited) 19.8 77.8 14.6 195.3 307.5
Year ended 31 December 2016
Capital
Share Share redemption Retained Total
capital premium reserve earnings Equity
GBPm GBPm GBPm GBPm GBPm
As at 1 January 2016 19.8 77.7 14.6 185.7 297.8
Profit for the year - - - 81.3 81.3
Actuarial losses recognised on
defined benefit pension schemes - - - (27.2) (27.2)
Deferred taxation on pension
liability - - - 3.6 3.6
Deferred taxation on derivative
instruments - - - (0.8) (0.8)
Share based payments - - - 1.8 1.8
Deferred taxation on share based
payments - - - (1.6) (1.6)
Dividends to shareholders - - - (13.2) (13.2)
As at 31 December 2016 19.8 77.7 14.6 229.6 341.7
Condensed Consolidated Cash Flow Statement
Six months ended 30 June 2017
Unaudited Unaudited Audited
Six months Six months Year ended
ended ended 31 Dec
30 June 30 June 2016
2017 2016 GBPm
GBPm GBPm
------------------------------------------ ------------ ------------ ------------
Cash flows from operating activities
Profit for the period/year 36.0 37.4 81.3
Adjustments for:
Tax 8.6 9.3 10.5
Depreciation 10.0 9.9 21.5
Loss on disposal of plant and equipment - 0.2 -
Profit on disposal of rental fleet
vehicles (0.2) (0.2) (0.2)
Profit on disposal of business - - (28.0)
Amortisation of intangible assets 2.8 1.0 1.7
Share based payments 0.9 0.9 1.8
Interest income - (0.1) -
Interest payable 7.9 9.1 17.6
Debt issue costs 0.2 0.2 0.4
Impairment of goodwill - - 1.0
Changes in working capital
(Increase)/decrease in inventories (17.7) 18.9 (23.4)
(Increase)/decrease in trade
and other receivables (95.4) (77.4) 27.6
Increase in payables 113.4 98.6 93.2
Impact of net working capital
from discontinued businesses - - (70.2) Impact of net working capital of acquisitions - - 6.1 Cash generated from operations 66.5 107.8 140.9 Difference between pension charge and cash contributions (3.7) (3.4) (7.1) Net interest and costs on pension scheme obligation 1.7 1.3 3.7 Purchase of rental fleet vehicles (46.7) (44.6) (93.7) Proceeds from sale of rental fleet vehicles 43.3 44.2 87.4 Interest paid (7.9) (9.1) (17.6) Interest received - 0.1 - Tax paid (8.7) (6.0) (14.2) ------------------------------------------ ------------ ------------ ------------ Net cash inflow from operating activities 44.5 90.3 99.4 ------------------------------------------ ------------ ------------ ------------ Cash flows from investing activities Acquisition of subsidiaries - - (92.6) Purchase of property, plant and equipment (19.7) (19.8) (36.3) Purchase of intangibles (7.1) (3.0) (9.2) Proceeds from sale of property, plant and equipment 3.0 27.5 28.9 Net proceeds from sale of business - - 111.5 ------------------------------------------ ------------ ------------ ------------ Net cash (used)/generated by investing activities (23.8) 4.7 2.3 ------------------------------------------ ------------ ------------ ------------ Cash flows used by financing activities Proceeds from share save scheme 0.8 0.1 - Repayment of loans (5.2) (5.7) (10.2) New loans - 1.0 14.0 Dividends (9.5) (8.1) (13.2) Net cash outflow from financing activities (13.9) (12.7) (9.4) ------------------------------------------ ------------ ------------ ------------ Increase in cash and cash equivalents 6.8 82.3 92.3 Cash and cash equivalents at the beginning of the period/year 28.8 (63.5) (63.5) ------------------------------------------ ------------ ------------ ------------ Cash and cash equivalents at the end of the period/year 35.6 18.8 28.8 ------------------------------------------ ------------ ------------ ------------
Notes to the Set of Financial Information
Six months ended 30 June 2017
1. GENERAL INFORMATION
The financial information for the period ended 30 June 2017 and similarly the period ended 30 June 2016 has neither been audited nor reviewed by the auditor. The financial information for the year ended 31 December 2016 has been based on information in the audited financial statements for that year.
The information for the year ended 31 December 2016 and the Interim Financial Report for the period ended 30 June 2017 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor's report on those accounts was not qualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain statements under section 498 (2) or (3) of the Companies Act 2006.
2. ACCOUNTING POLICIES
The annual financial statements of Lookers plc are prepared in accordance with IFRSs as adopted by the European Union. The set of condensed financial statements included in this half yearly financial report has been prepared in accordance with International Accounting Standards 34 'Interim Financial Reporting', as adopted by the European Union. The same accounting policies, presentation and methods of computation are followed in the half yearly financial report as applied in the group's latest annual audited financial statements.
For the year ended 31 December 2016, the group adopted a number of new standards and interpretations which are listed on page 91 to 92 of the 2016 Annual Report. The adoption of the new standards and amendments included in this report have had no significant impact on the financial statements of the group. Furthermore, at the date of authorisation of the half yearly financial report there are a number of standards and interpretations also listed on page 91 of the 2016 Annual Report which were in issue but not yet effective. As such these have not been applied in this half yearly financial report. The directors anticipate that the adoption of these standards and interpretations in future periods will have no material impact on the financial statements of the group except that IFRS 15 may have an impact on revenue recognition and related disclosures. IFRS 16 may have an impact on the reported assets, liabilities, income statement and cash flows of the group and require extensive disclosures.
Basis of preparation: Going concern
This financial information has been prepared on a going concern basis which the directors believe to be appropriate. This conclusion is based on, amongst other matters, a review of the group's financial projections together with a review of the cash and committed borrowing facilities available to the group.
At 30 June 2017 the medium-term banking facilities included a revolving credit facility of up to GBP150.0 million and a term loan totalling GBP80.0 million, providing total facilities of GBP230.0 million. These facilities are due for renewal on 31 March 2020.
Notes to the Set of Financial Information
Six months ended 30 June 2017 (Continued)
3. SEGMENTAL REPORTING
At 30 June 2017 the group is organised into one business segment being motor distribution. The parts distribution segment was discontinued on the sale of FPS Distribution on 4 November 2016.
Unaudited Motor
Six months Distribution Unallocated Group
ended 30 June 2017 GBPm GBPm GBPm
----------------------------------------- -------------- ------------ --------
Continuing operations
New Cars 1,311.7 - 1,311.7
Used Cars 886.7 - 886.7
Aftersales 260.1 - 260.1
----------------------------------------- -------------- ------------ --------
Revenue 2,458.5 - 2,458.5
----------------------------------------- -------------- ------------ --------
Segmental result before amortisation
of intangible assets 58.1 - 58.1
Amortisation of intangible assets - (2.8) (2.8)
Interest expense (6.3) (1.6) (7.9)
Share based payments - (0.9) (0.9)
Net interest and costs on pension
scheme obligation - (1.7) (1.7)
Debt issue costs - (0.2) (0.2)
----------------------------------------- -------------- ------------ --------
Profit before taxation 51.8 (7.2) 44.6
Taxation (8.6)
----------------------------------------- -------------- ------------ --------
Profit for the financial period
from continuing
operations attributable to shareholders 36.0
----------------------------------------- -------------- ------------ --------
Segmental assets 1,866.9 - 1,866.9
----------------------------------------- -------------- ------------ --------
Total assets 1,866.9 - 1,866.9
----------------------------------------- -------------- ------------ --------
Segmental liabilities 1,361.5 - 1,361.5
Unallocated liabilities
- Corporate borrowings - 134.6 134.6
Total liabilities 1,361.5 134.6 1,496.1
----------------------------------------- -------------- ------------ --------
Parts
Unaudited Motor Distribution
Six months Distribution (Discontinued) Unallocated Group
ended 30 June 2016 GBPm GBPm GBPm GBPm
------------------------------------------ -------------- ---------------- ------------ --------
Continuing operations
New Cars 1,188.2 - - 1,188.2
Used Cars 808.7 - - 808.7
Aftersales 228.4 115.2 - 343.6
Revenue 2,225.3 115.2 - 2,340.5 ------------------------------------------ -------------- ---------------- ------------ -------- Segmental result before amortisation of intangible assets 53.6 7.5 (2.0) 59.1 Amortisation of intangible assets - - (1.0) (1.0) Interest expense (6.5) - (2.6) (9.1) Interest income - - 0.1 0.1 Share based payments - - (0.9) (0.9) Net interest and costs on pension scheme obligation - - (1.3) (1.3) Debt issue costs - - (0.2) (0.2) ------------------------------------------ -------------- ---------------- ------------ -------- Profit before taxation 47.1 7.5 (7.9) 46.7 Taxation (9.3) ------------------------------------------ -------------- ---------------- ------------ -------- Profit for the financial year from continuing operations attributable to shareholders 37.4 ------------------------------------------ -------------- ---------------- ------------ -------- Segmental assets 1,479.5 167.9 - 1,647.4 ------------------------------------------ -------------- ---------------- ------------ -------- Total assets 1,479.5 167.9 - 1,647.4 ------------------------------------------ -------------- ---------------- ------------ -------- Segmental liabilities 1,126.7 84.8 - 1,211.5 Unallocated liabilities * Corporate borrowings - - 128.4 128.4 ------------------------------------------ -------------- ---------------- ------------ -------- Total liabilities 1,126.7 84.8 128.4 1,339.9 ------------------------------------------ -------------- ---------------- ------------ --------
Notes to the Set of Financial Information (continued)
Six months ended 30 June 2017
3. SEGMENTAL REPORTING (continued)
Parts
Motor Distribution
Year ended Distribution (Discontinued) Unallocated Group
31 December 2016 GBPm GBPm GBPm GBPm
---------------------------------------- -------------- ---------------- ------------ --------
Continuing operations
New Cars 2,206.1 - - 2,206.1
Used Cars 1,437.2 - - 1,437.2
Aftersales 444.9 193.5 - 638.4
Revenue 4,088.2 193.5 - 4,281.7
---------------------------------------- -------------- ---------------- ------------ --------
Segmental result before amortisation
of intangible assets 82.6 12.1 - 94.7
Amortisation of intangible assets - - (1.7) (1.7)
Interest expense (13.4) - (4.2) (17.6)
Share based payments - - (1.8) (1.8)
Impairment of goodwill - - (1.0) (1.0)
Exceptional items - - 23.3 23.3
Net interest and costs on pension
scheme obligation - - (3.7) (3.7)
Debt issue costs - - (0.4) (0.4)
Profit before taxation 69.2 12.1 10.5 91.8
Taxation (10.5)
---------------------------------------- -------------- ---------------- ------------ --------
Profit for the financial year
attributable to shareholders 81.3
---------------------------------------- -------------- ---------------- ------------ --------
Segmental assets 1,707.8 - - 1,707.8
Total assets 1,707.8 - - 1,707.8
---------------------------------------- -------------- ---------------- ------------ --------
Segmental liabilities 1,252.2 - - 1,252.2
Unallocated liabilities
* Corporate borrowings - 113.9 113.9
---------------------------------------- -------------- ---------------- ------------ --------
Total liabilities 1,252.2 - 113.9 1,366.1
---------------------------------------- -------------- ---------------- ------------ --------
For the purposes of monitoring segment performance and allocating resources between segments, the group's Chief Executive monitors the tangible, intangible and financial assets attributable to each segment. All assets are allocated to reportable segments with the exception of other financial assets (except for trade and other receivables) and tax assets. Assets used jointly by reportable segments are allocated on the basis of the revenues earned by individual reporting segments.
4. Dividends
An interim dividend of 1.41p per ordinary share is proposed (2016: 1.28p per share).
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 Dec
2017 2016 2016
p p p
--------------------------------------- ------------ ------------ --------
Ordinary dividend per share - paid in
period/year 2.36 2.05 3.33
--------------------------------------- ------------ ------------ --------
- proposed 1.41 1.28 2.36
--------------------------------------- ------------ ------------ --------
The interim dividend will be paid on 24 November 2017. The ex-dividend date for the interim dividend will be 26 October 2017 and the record date will be 27 October 2017.
Notes to the Set of Financial Information (continued)
Six months ended 30 June 2017
5. FINANCE costs - net
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 Dec
2017 2016 2016
GBPm GBPm GBPm
--------------------------------------------- ------------ ------------ --------
Interest expense
On amounts wholly repayable within
5 years:
Interest payable on bank borrowings (2.4) (3.2) (5.6)
Interest on consignment vehicle liabilities (5.5) (5.9) (12.0)
Interest and similar charges payable (7.9) (9.1) (17.6)
--------------------------------------------- ------------ ------------ --------
Interest income
Bank interest - 0.1 -
--------------------------------------------- ------------ ------------ --------
Total interest receivable - 0.1 -
--------------------------------------------- ------------ ------------ --------
Net interest (7.9) (9.0) (17.6)
--------------------------------------------- ------------ ------------ --------
6. earnings per share
The calculation of earnings per ordinary share is based on profits on ordinary activities after taxation amounting to GBP36.0 million (2016: GBP37.4 million) and a weighted average of 396,913,653 ordinary shares in issue during the period (2016: 396,234,390). The diluted earnings per share is based on the weighted average numbers of shares, after taking account of the dilutive impact of shares under option of 15,298,787 (2016: 8,559,040). The diluted earnings per share is 8.73p (2016: 9.24p). Adjusted earnings per share is stated before amortisation of intangible assets, exceptional items, pension costs, impairment of goodwill, debt issue costs and share based payments and calculated on profits of GBP41.6 million for the period (2016: GBP40.8 million).
Unaudited Unaudited Audited
Six months Six months Year ended
ended ended 31 Dec 2016
30 June 2017 30 June 2016
Earnings
Earnings Earnings per
Earnings per share Earnings per share Earnings share
GBPm p GBPm p GBPm p
------------------------------- --------- ----------- --------- ----------- --------- ---------
Earnings attributable to
ordinary shareholders 36.0 9.07 37.4 9.44 81.3 20.51
Amortisation of intangible
assets 2.8 0.71 1.0 0.25 1.7 0.43
Net interest and costs
on pension scheme obligation 1.7 0.43 1.3 0.33 3.7 0.93
Exceptional items - - - - (23.3) (5.88)
Impairment of goodwill - - - - 1.0 0.25
Share based payments 0.9 0.23 0.9 0.23 1.8 0.45
Tax on exceptional items - - - - (3.7) (0.93)
Debt issue costs 0.2 0.05 0.2 0.05 0.4 0.10
------------------------------- --------- ----------- --------- ----------- --------- ---------
Adjusted 41.6 10.49 40.8 10.30 62.9 15.87
------------------------------- --------- ----------- --------- ----------- --------- ---------
7. TAXATION
The tax charge for the period has been provided at the effective rate of 19.3% (2016: 19.9%) representing the best estimate of the average annual effective tax rate expected for the full year applied to the pre tax income for the six month period.
8. PENSIONS
The defined benefit obligation as at 30 June 2017 has been calculated in a manner consistent with that used in the group's latest annual audited financial statements. This is calculated as a valuation update as at 30 June 2017 by a qualified independent actuary to take account of the requirements of IAS19 (Revised). Scheme liabilities have been calculated using a consistent projected unit valuation method and compared to the schemes' assets at their market value at 30 June 2017.
9. RISKS AND UNCERTAINTIES
There are a number of potential risks and uncertainties which could have a material impact on the group's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results. The Board believes these risks and uncertainties to be consistent with those disclosed in pages 49 and 50 of our latest annual report, including general economic factors such as oil prices, interest rates, manufacturers' influence and stability.
10. INTERIM STATEMENT
The interim announcement was approved by the Board and will be posted to shareholders in September 2017. Copies are also available to the public at the registered office of the company at 776 Chester Road, Stretford, Manchester M32 0QH.
Responsibility Statement
We confirm that to the best of our knowledge
(a) The interim financial statements have been prepared in accordance
with IAS 34 'Interim Financial Reporting'.
(b) The interim financial statements include a fair review of the
information required by DTR 4.2.7R
(identification of important events during the first six months
and their impact on the condensed set of financial statements
and description of principal risks and uncertainties for the
remaining six months of the year); and
(c) The interim financial statements include a fair review of the
information required by DTR 4.2.8R
(disclosure of related parties' transactions and charges therein).
By order of the Board
Andy Bruce Robin Gregson
Chief Executive Chief Financial
Officer
16 August 2017 16 August 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR GMGMRRKGGNZM
(END) Dow Jones Newswires
August 16, 2017 02:00 ET (06:00 GMT)
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