Lookers PLC Quarter One Trading Update (7763E)

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: [phone] 
 Robin Gregson, Chief Financial Officer 
 
 Bell Pottinger                          Tel: [phone] 
 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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