Lookers Share Discussion Threads

[farrugia] 10/2/2021 16:56

well i've been buying - they have a great online property at

[woodwards26] 05/2/2021 15:19

It was the sensible thing to do to sell before suspension

[nick rubens] 05/2/2021 10:02

Well done to those who held into suspension. I bailed out just prior and missed out on an incredible post suspension share price.

Did Wobbly123 claim he was shorting this? What's the update Wobbly? cheers NR

[mortimer7] 04/2/2021 09:52

This morning the SMMT has published the numbers for UK new car registrations for January.
Total registrations were 90,249, a reduction of 39.5% on January 2020 total of 149,279.
Today SMMT have issued their revised forecast for the full year registrations which is 1,887,000 which would represent a 15.7% increase on 2020 total.

[jabers1] 04/2/2021 07:46

Strong Results From Vertu

[woodwards26] 03/2/2021 21:27

All my own illogical opinion but a brief look at trades made me think most people don't understand the car business although many think they do .Seems to me a few people are over worried and selling maybe even taking profit from buying in the months before suspension and needing to see their money again. But a lot of buys 100,000 and well over slipping in here and there probably by those that have a better understanding of this business could even be one buyer.These few weeks after coming back from suspension are also the time the motor trade is even in the best of years losing money a pre plate change month. So not much good news will be coming out for a while what a great time for a predator to build up a stake.All my instincts And past observation tells me this is worth double Vertu but In my opinion Vertu is only worth 39p to 41p in a normal period And is currently to expensive in this market.Personaly my current position is to just have a few but in another few weeks once the business's open fully and we have 3 things driving the market 1 it's spring people have always bought cars in Spring 2 Pent up demand 3 New 21 plate so business will be good. I will be looking again if you want the best way to know if to buy then watch closely your local new and used car dealerships in the week lockdown is relaxed. Visit 3 of 4 And you will just know which way to go I promise.I'm not a big poster so may not post again for a while enjoy doing a bit of mystery shopping before you decide which way to go on this.Take the following info account when the pundits start reporting on the Numbers as we come out of lockdownMarch registrations will likely be down on last year as about half of orders ar? taken in February . But April registrations are likely to eclipse any other April as April is normally low. Last years April is Irrelevant as we were in full lockdown.

[woodwards26] 02/2/2021 16:49

Give it a rest

[woodwards26] 02/2/2021 16:46

To me only question is will they survive if so then within a year we will double our money.To survive through till say May 2 things only are important Cashflow and Staff Mood .Having survived till now makes likely survival more likely as manufacturers and finance companies will be paying out year end bonuses etc any day soon . The money will likely already be in the accounts and be part of debtors on the balance sheet but will have a huge positive effect on cash flow . Of course their bankers will already know this so if you were thinking about pulling the plug you would wait for the money to arrive but on the otherhand it improves the chance of survival.Staff mood needs to be ready and primed for the day someone turns the tap on I'm not sure that they are really ready but I'm happy to be in with just a few at the moment

[jabers1] 02/2/2021 16:33

WOBBLY123 There are people out there who can help you, don’t be lonely, just call them, I’m sure they will help you. Ye 🤡🤡🤡

[wobbly123] 02/2/2021 16:15

2 + 3 -4 = 5 IF YOU DON'T BOTHER WITH DEDUCTING THE 4

[jabers1] 02/2/2021 13:13

LOOKERS BROKERS NOTE

Lookers has published interim results for the six months ended 30 June and has applied to the FCA to restore its share listing. The interim loss of £36.1m is much better than our £50m forecast loss, driven by a marked improvement in working capital efficiency and gross margin. With significant cost reductions (£50m annualised payroll cost), H2’s profit will almost offset the H1 loss, we upgrade from c.£20m loss to a c.£4m loss. With significant operational improvements and lower debt levels, Lookers looks well placed for recovery. We set a 75p 12 mth TP, expecting the shares to quickly reset from FY21 PER of 4.5x.

Interim results show Covid impact. With H1 sales down 40% as UK new car registrations fell by c.49% over the period, Lookers reported an Adj loss of £36m, actually much better than feared (PHe -£50m), with the outperformance driven by stronger gross margins. H1 net debt improved to just £11m (Dec 19 £59.5m).
Substantial operational improvements. Towards the end of FY19, Lookers was carrying stock of £240m, average used stock levels are now c.£145m. This has not had an impact on sales volumes; average stock turn is 35-40 days rather than the 55-60 days before. Previously c.30% of stock was over 60 days old, vs 6-7% of stock in September 2020. With much faster stock turn, margins have improved materially, one of the key reasons for H1 outperformance and our full-year upgrade. Lookers has saved annualised payroll costs of c.£50m, representing c.1,500 heads.
Forecast changes. As with many retailers, Lookers has yet to give revised guidance due to the uncertainty of Lockdown 3. With H1 c.£14m ahead of forecast and the improvements in working capital driving better used car margins, coupled with the restructuring and payroll savings starting to come through in H2, we upgrade our full-year loss to £3.8m from c.£20m. For FY21, we forecast PBT of £23.7m, an upgrade of £3.1m. Were it not for Lockdown 3, we would have been more optimistic with our profit forecasts.


Twelve month target price set at 75p for relisting. Lookers is starting to look like a business transformed, with used car margins benefiting from much greater focus on working capital management and basic controls and a more efficient cost base. The customer journey is also much easier, with unaccompanied test drives (saving 25 mins), no lengthy document signing processes (now sent to customers’ homes) and contactless handover. The key question is what does normal look like? Cost savings will annualise into FY21 (c.£15m net benefit) and car margins will continue to recover thanks to working capital improvements. SMMT market forecasts of two million new car registrations (+25% from 2020) looks optimistic given Lockdown 3 and is likely to be revised down, we’re forecasting 15% growth at Lookers. Longer term, the path back to 1.5% PBT returns on sales seems a sensible expectation for normal, a level of profitability materially ahead of our current forecasts.

Valuation . 75P

[flyfisher] 02/2/2021 12:47

JAF111, Yes i have looked at a few.

MMH stands out as being well managed, the covid trading impact has been restricted to a few changes that probably would have been made anyway and cash flow has been good enough to prepay deferred vat. They recently twice reported trading ahead of expectations with exceptional margins, so good results are to come in march. The only negative i can find is the interest rate increase on its revolving credit line. It is a thin market so stock is hard to buy in size.

I hold MMH

LOOK, has had sweeping management changes and has recovery potential, but with many more questions about trading, margins and debt, the only broker forecast i can find gives 4.7p forward earnings. Much easier to buy in size though.

If anyone has a brokers note on LOOK, i would be interested in reading it.

[jabers1] 02/2/2021 09:10

JAF111 just check the industry KPI’s, Grant Thornton, ASE (global) Trevor Jones etc all have key data that always makes for an interesting read.

[jaf111] 02/2/2021 08:45

Has anyone done any comparisons with the other car dealers??? In particular VTU & MMH?

[jabers1] 02/2/2021 08:39

Lookers now have perhaps the best DIS utilisation of their used cars in the Industry. They’ve also sold their Agricultural division which was a hinderance.

Brokers have set a target price of 75p per share based on 2021 FY delivering £21m, the last 6 months of 2020(H2) will deliver £36m when announced end of April.

The provision of circa £15m for any FCA fine is seen as an “excessiveR21; provision.

2021 can easily deliver £35m subject to lockdown easing and all dealerships open again by April.

The subscription model will start coming into play in the not too distant future and this will help all large dealer groups who have strong relationships with their franchises they represent, Marshall Motors CEO Mr Gupta explained 2 weeks ago at the online Automotive Management Conference, Lookers already have the partnership for the Polestar Brand which works great and already well ahead of Budget.

They have the Polestar franchise along with one other for the whole of the UK.

[woodwards26] 02/2/2021 00:05

They seem to be grouping service and parts under after sales parts would typically make 20 % margin with most sales driven by service unless they have a wholesale parts division.A car dealership is a slot machine you sell a new car it produces it's own margin then 2 to 3 yrs service work and parts sales. Then if we look after them 60 something percent come back and we have a used car to retail at a good margin and with a switched on manager a good margin also from the rest we trade. A fair number of used cars are bought in from daily rentals , manufactures etc . Sales dept in preparing both new and used is the biggest customer of the service department and so it goes round and round.But great fun when you tweak it here and there and turn a loss making dealer into a highly profitable one

[daz1712] 01/2/2021 18:29

Gross profit £m. Margin
New cars 147 6.6%
Used cars 138.1. 5.9%
Aftersales 211.9. 43%
Leasing and other 16.1

Aftersales is a key part of the Group and represented 41.3% (2018: 38.9%) of total gross profit. The division continued to perform as expected with a like-for-like revenue growth of 4.5% in the year.
These are 2019 figures

[jabers1] 01/2/2021 17:46

🤡🤡🤡 I’m surprised you can spell adult you 🤡🤡🤡

[wobbly123] 01/2/2021 17:37

Woodwards26,

Glad we have adults on this forum that can add knowledge.

Regards
Wobbly123 -my only posting name.

[woodwards26] 01/2/2021 16:45

No Daz most profitable is used car sales followed by New in most dealerships % gross margin is lower than service but actual number will be far higher say a car at 15000 and gross 1250 then only 8% margin ish . Then lots of potential year end money and hopefully a high percentage of customers visit the service dept fir next 3 yearsAfter sales service should be 70 to 80 % of sales value which is basically what is recovered from a customer before VAT less what the technicians cost eg sell 12000 hrs at average 70 per hr 840000 labour sales less techs at 120000 x20 240000 cost so labour profit 600000 71% ish. A lot of background staff needed to produce that 600 k Same site would likely sell 700 used and produce 1 million gross

[daz1712] 01/2/2021 15:16

The most profitable part of the business is aftersale service, there doesn’t seem much margin on the new sales but guess the more new sales = 1-3 years after sales
Got to be making eps 10-15p in 2022/23 year end with a forward earning ratio x8-15 with dividend

[woodwards26] 01/2/2021 15:01

So left October around 20k in profit Nov lockdown not quite as good as May lockdown different time of year so loses 35k so back into 15k ish loss December year end bonuses kick in but not as high as usual years so instead if making 50k they make 20k to bring full year to either side of break even.Then 2021 January February click and collect they've got better at Feb is usually slow anyway so probably into loss of 50 k year to date . But if business starts in March I believe it will take off and the 50 k ytd profit will produce at year end December 150 /175k instead of the 200k to 225k but if we don't restart till April then it takes another 25k hit.But whatever that dealership over 3 yrs 2019 2020 2021 will look something like225k 19 k loss150 k profit and hopefully flying in 2022