Lookers Share Discussion Threads

[jabers1] 04/4/2021 12:51

LOOKERS AND PENDRAGON ARE WELL AHEAD OF CAZOO

BUSINESS


Pendragon is bigger in online used car sales than Cazoo yet it’s worth a fraction of it. Go figure...

Magical valuations for some miss hidden value in old tech stocks

Cazoo says used cars in Europe are a $700bn market
Cazoo says used cars in Europe are a $700bn market / PA Archive
By Jim Armitage@ArmitageJim

There is an intoxicating fairy dust is in the air. It hovers around the valuations of tech companies, inflating their valuations like enchanted puffballs. Deliveroo: £8 billion, Trustpilot: £1.1 billion. Moonpig: £1.5 billion.

All that capital chasing up the magic of tech is having the opposite effect on some of the older companies with decent assets that make a — clutch those pearls — pre-tax profit.

One such is Pendragon, the car dealership which has been undergoing a steady transformation under new CEO Bill Berman.

The legacy he inherited didn’t look promising: previous management left him a bloated business with too many poorly performing dealerships and unproductive staff.

But here’s the thing: he also has a business that sells used cars online. The whole process, from choosing, ordering, financing to home delivery can be done sitting at home on your laptop.

It does, in short, the same thing as Cazoo in the UK and Carvana in the US. Cazoo currently has around 3400 cars listed online, while Berman has 16,000.

[ali47fish] 04/4/2021 10:40

is lookers listed on aim please anyone?

[jabers1] 01/4/2021 16:13

The SMTA figures will be out next week and the sector is performing well above forecast.

The margins on used cars are some of the best ever achieved, new bonnet profit is also ahead of budget.....

[sphere25] 01/4/2021 15:52

A tad perky here with the price currently up 3.8% at 55p.

It is having a go at a breakout, but with it being so quiet out there and volumes light here with 489k exchanged, it is hard to say if this is the breakout i.e. is everyone actually involved as we approach the Easter holiday weekend.

Nonetheless, the chart is an interesting one to keep a tabs of because the price is sat consolidating in a very visible range so one to watch for a break higher.

All imo
DYOR

[flyfisher] 31/3/2021 10:14

jabers, Cazoo acquired imperial last year and so has a bigger infrastructure than expected.. However, i still don't understand the valuation.

''Online car retailer Cazoo has acquired Imperial Car Supermarkets, one of the largest independent used car retailers in the UK.

Imperial Car Supermarkets has 18 retail sites across the UK, offering over 2,500 nearly new and used cars for sale and supported by a number of service, preparation and support centres.

The deal provides Cazoo with a national network of storage, distribution, after sales and collection hubs. This comes after Cazoo raised a further £25m of funding in recent months.

Alex Chesterman OBE, founder and CEO of Cazoo, said: “The acquisition of Imperial Car Supermarkets will enable Cazoo to better serve its customers and fulfil our increasing number of deliveries throughout the UK. This deal provides us with key infrastructure as well as a wealth of automotive expertise which will help accelerate our growth.”

Neil Smith, operations director of Imperial Cars, added: “Alex and his team at Cazoo have a very clear vision and we’re looking forward to Imperial being part of that story.”

[wobbly123] 30/3/2021 13:40

woodwards26,

I only trade if sue enough to enter with a decent sum. If £100 a month into something turned to be a great investment I would feel disappointed that I didn't invest a decent sum.
The problem with Crypto is that some unknown person states only so many coins exist, who says that is accurate.
For me shorting US has the most potential, COVID is increasing and stock prices are almost the same as pre covid, but a years business has been lost.
I have to admit I find shorting much easier than going long.
Good luck with your investment.

[woodwards26] 30/3/2021 12:56

Wobbly but for a bit of interest and with say £100 a month into something like Coinbase to buy Bitcoin could do well . I'm just about to do that I'll treat it as money spent rather than invested tho

[woodwards26] 30/3/2021 12:42

Same as white goods tho many years ago sales service parts all in one dealership selling maybe 2 brands.It will happen it's just about when and who

[woodwards26] 30/3/2021 12:39

Yes I wouldn't want to invest just yet but willbe watching I'm fortunate my son started his on line business a few years back done extremely well so is a good sounding board for anything web based.Someone will find a model that works I'm surprised autotrader don't play around with it till they can get it working . They already have the traffic and brand

[daz1712] 30/3/2021 12:37

A valuation of $7 billion for an Online used car company seems crazy, a bit like £7billion for a food delivery company tomorrow, but I guess they are betting on everyone staying at home for the next 10years and ordering everything online
Not going to happen, when the warning lights comes on the dashboard cazoo won’t want to know, your friendly main dealers will be the person to call.

[wobbly123] 30/3/2021 11:23

woodwards26,

I question if the US model will work in the UK as well.

As to SPAC's, in my opinion they are the biggest bubble the financial world has ever seen. Many business's are using SPAC's as opposed to IPO'S as they are quick, have little transparency and are being used by business's that have never made a profit and possibly never will.
We live in a mad world SPAC, Cryto Currencies, "digital art".

[woodwards26] 30/3/2021 10:51

This is interesting https://www.fox13memphis.com/news/consumer/clark-howard/carvana-review/23K3YQB7A7JIKAXY7ZQLZXRKMI/I think maybe early next year Cazoo could be worth looking at with profits from lookers

[woodwards26] 30/3/2021 10:42

Someone will get it to work but whether it's them who knows.It's already working at wholesale level without all the distribution centres but retail is a whole different thing but maybe utilising dealers in something like autotrader and evolving it someone will crack it just like other sectors have.

[jabers1] 30/3/2021 07:02

Cazoo Agrees $7 Billion SPAC Deal With Och .. Cazoo Ltd. will list in New York after selling itself to hedge-fund founder Dan Och’s blank-check company in a deal valued at $7 billion.

TODAY CAZOO HAS 3400 USED CARS FOR SALE AND LOOKERS HAVE OVER 10000.

LOOKERS HAVE SITES ALL OVER THE UK AND CAZOO HAVE 4 SITES BIRMINGHAM BRISTOL SOUTHAMPTON AND WEMBLEY.

LOOKERS VALUED AT £200M AND CAZOO AT $7BILLION.

The combination with special-purpose acquisition company Ajax I will raise about $1.6 billion in proceeds for the company, including $805 million in a cash trust from the SPAC and another $800 million from Ajax’s sponsors, Cazoo said in a statement on Monday. London-based Cazoo will be listed in New York after the deal closes, and Och said he plans to join the company’s board.

IF ONLINE SALES WERE GOING TO WORK THE CAR MANUFACTURERS WOULD HAVE HAD SUCCESS YEARS AGO FROM DIRECT SALES,IT IS IMPOSSIBLE TO MAKE IT WORK WITHOUT A DISTRIBUTION NETWORK FOR CUSTOMER CARE AND MANY OTHER ISSUES.

[woodwards26] 29/3/2021 08:09

After sales nett profits rarely cover the indirect costs most of the profit is in used cars so anyone that can make used car sales work on line is onto a winner.Only major success of online used car sales so far and that's indirectly is autotrader

[jabers1] 29/3/2021 07:43

ZERO FRANCHISES AND LIMITED RETURNING AFTER-SALES WORK...🤷7995;‍♂5039; THE VALUATIONS DO NOT MAKE ANY SENSE...

[oharebj] 24/3/2021 07:18

Extract from Pendragon's results out today. They are managing this lockdown better - hope Lookers doing the same!" January & February Trading Update ================================= * Whilst performance has undoubtedly been impacted by the ongoing third national lock-down, the improvements made to the Group's digital proposition have enabled it to trade with a high level of resilience, with over 20,000 vehicles delivered to customers in the first two months of the year. * Group like-for-like new car volumes are 24.3% lower year on year to the end of February, vs the SMMT reported market reduction of 38.1%, and used car volumes are down 32.8%. Aftersales has been more resilient, with gross profit down 13.1% vs last year. Overall, we are pleased with this performance against the challenging conditions of trading in lock-down. * Sales declines have been more than offset by improved gross margins combined with the benefit of a lower cost base, resulting in an underlying loss before tax of GBP4.8m, an improvement of GBP3.4m against the same period in FY20 (FY20: Loss of GBP8.2m). "

[flyfisher] 23/3/2021 09:11

The lookers website shows that several major shareholders have increased their holdings during feb.
Yet the artemis, hambro, aberforth increases have not been reported to the market.

[flyfisher] 22/3/2021 09:28

MBO at Cambria.
It's unlikely that they would be doing this if sector prospects were poor.

[oharebj] 22/3/2021 09:07

Pendragon results on Wednesday. Obviously not Lookers but may give some clue as to how the market is faring

[daneswooddynamo] 22/3/2021 09:01

Hard not to see car sales benefitting from lack of foreign holidays

[oharebj] 19/3/2021 07:39

Encouraging.At 0910 GMT, the shares were up 9.4% at 53.90p.Peel Hunt said it had been expecting a full-year loss of £3.8m. "The outperformance reflects a significant improvement in working capital, leading to lower stock provisions, and a strong end to the year, achieving OEM targets," it said."Net debt levels have also improved significantly from £45m in December. Given the one-off nature of the outperformance, we leave our ongoing forecasts unchanged, although industry commentary suggests the market is performing well in the key month of March."The broker said the key question is how long it will take to get profits back up to the £65m+ level.Liberum, which had been expecting a £3.2n loss, said net debt of £45m was as expected."While encouraging to see a better FY20E result, the key will be what the recovery trajectory looks like from here. Q1 will be tough, given the lockdown impact on the largest new car trading month of March, but we expect demand to be strong once dealerships reopen in April."

[woodwards26] 18/3/2021 22:29

Second half likely includes 10 million they had earmarked for fine

[sphere25] 18/3/2021 14:20

It looks like the next leg up here with the price currently holding up well intraday near the highs at 53.5p. Surprised that the volume is so low on the back of that update - only 892k so far with no material prints outside of the LSE.

54p looks key on an intraday basis - have some sellers there. There was a decent clearout at 12:12.

Some broker coverage here:

"Peel Hunt said it had been expecting a full-year loss of £3.8m. "The outperformance reflects a significant improvement in working capital, leading to lower stock provisions, and a strong end to the year, achieving OEM targets," it said.

"Net debt levels have also improved significantly from £45m in December. Given the one-off nature of the outperformance, we leave our ongoing forecasts unchanged, although industry commentary suggests the market is performing well in the key month of March."

The broker said the key question is how long it will take to get profits back up to the £65m+ level.

Liberum, which had been expecting a £3.2n loss, said net debt of £45m was as expected.

"While encouraging to see a better FY20E result, the key will be what the recovery trajectory looks like from here. Q1 will be tough, given the lockdown impact on the largest new car trading month of March, but we expect demand to be strong once dealerships reopen in April."


All imo
DYOR