Lookers Share Discussion Threads

[mortimer7] 08/11/2019 09:45

Just a point on net debt and interest.
The bulk of the £18.3m interest last year (£13m) is on Manufacturer Vehicle Consignment Stock Liabilities & Stocking Loans. An unavoidable fact of life for franchised motor retailers.

[f15jcm] 06/11/2019 18:19

Even money I would say. New management may well want to kitchen sink and fix the balance sheet to allow them to make progress.

[givememymoneyback] 06/11/2019 12:15

What's the likelihood of a rights issue here? It's been many years since the last one, hasn't it? There's a lot of intangibles in the assets and I'm guessing that if you take these out and factor in fines and compensation for customers, the NAV might be around zero, even allowing for the value of properties. I think LOOK might need cash fast. Thoughts anyone? Was the last rights issue in 1996? Is there a quicker easier way of raising money? I'm imagining the banks might not be keen on additional loans right now.

[f15jcm] 05/11/2019 19:39

The business is in a mess and more to the point, it's not remotely cheap by any measure. That's the reason why we're not going to see more insider buying IMO. Also, they're trying to pull the wool with their net debt figures. Do you really think they paid £18.3m in interest on only £86.9m last year? Bidders seem quite happy to wait and buy hopeless businesses off administrators or bid at a discount (CPR). The rumoured Swedish bid for PDG never materialised and I'm not expecting any serious interest here. If the banks start flexing their muscles, this could get ugly.

[gutterhead] 05/11/2019 17:26

Can't see it getting easier.
Q4 is always challenging and if the accountants are in charge, used car buying will be held back in December (schoolboy error), with businesses paying more for stock in January; this affects used car profitability significantly in the best used car month of the year (Jan)
Losing two key/influential directors will create instability in the senior operating level.
Goodness knows what the FCA investigation will find, the fine may be minimal or it may be significant bearing in mind it is covering three years.
Tough times ahead for the sector and I could see this suffering further imo.

[essentialinvestor] 05/11/2019 16:20

Tony does not appear to have added, at least not been RNS'd yet?.

Truth, can't see 2020 being any easier for the sector.

Plus FCA report in to Lookers to come - the flip side is perhaps the
value of their property holdings and any profitability in the business.

High risk/reward and speculative at this point imv.
Some investors can live with that.

[truthandnumbers] 05/11/2019 16:07

So is this just a pause for breath or do people here think recovery is likely?

[gutterhead] 05/11/2019 15:37

Hi Mortimer, thanks and no probs 👍🏼

[mortimer7] 05/11/2019 14:31

gutterhead, apologies if my post above is unclear.

What I was referring to above is the FCA investigation in to Motor Finance Commission for the whole industry which has been ongoing in 2019.

It is this Consultation Paper(CP19/28)that is published on their website in October.

[gutterhead] 05/11/2019 13:22

I've looked on fica website and can't see findings so far? think that would be very unusual and would be market sensitive so would expect a full report to be issued upon completion of investigation. I obv could be wrong

[mortimer7] 05/11/2019 11:51

For information:
The FCA consultation on Motor Finance commission closes on 15/1/2020 & they state a policy announcement will be made in Q2 2020. (this is the industry one, not the Lookers specific investigation)
Findings so far can be viewed on the FCA website.

[mortimer7] 05/11/2019 11:49

This morning, SMMT published the unit numbers for new cars registered in the UK in October. The total was 143,251 a fall of 6.7% compared to October 2018 when the total was 153,599.

[f15jcm] 03/11/2019 18:13

Don't know those two very well but I note that VTU & MMH have been increasing their dividends, whereas CAMB hasn't

[jaf111] 03/11/2019 16:27

Not sure about VTU....IMO the sector out-performers appear to be Cambria (CAMB) and Marshall Motors

[f15jcm] 03/11/2019 14:38

I've always regarded takeover bids as a threat to short positions. Until I saw the bid for CPR earlier this week, that is.

[f15jcm] 03/11/2019 14:36

I'm not a 'punter' myself. Even if I were, why would you buy LOOK when you can get VTU on a lower valuation? Would consider VTU for an investment were it not for the FCA looking at the industry.

[essentialinvestor] 03/11/2019 14:16

Perhaps also worth keeping in mind who the largest shareholder is.

Any buy case is highly speculative and I'm not holding.

If the FCA investigation was not hanging over the company might
have bought a few. Some investors are capable of living with high risk/reward
but I'm getting a little old for that.

[f15jcm] 03/11/2019 10:40

Valid points but debt and operating losses do shift the odds. The current valuation, especially when compared to VTU, makes no sense.

[tim 3] 03/11/2019 00:03

Am with EI on shorting, very hard work to make it consistently pay gave up on it years ago.

So many things to look out for like spikes and rally's that come from nowhere (like yesterday) not to mention the fact you are basically fighting gravity as most shares rise over time.

Well done if you can make it pay though.

[f15jcm] 02/11/2019 17:54

I can afford to be patient but true. That said, there hasn't been any institutional short activity on CPR for nearly two years. Not the case with LOOK, it's already on Crispin Odey's radar.

[essentialinvestor] 02/11/2019 17:44

Problem is if short you need to time it, at least to an extent.

How many shorters did CPR ruin as the share price stayed elevated
at levels few anticipated, for a prolonged timeframe before an eventual
decline.

[f15jcm] 02/11/2019 16:45

Liberum predicting PTP of only £16.4m next year. Current mkt. cap. of £190m (with £74m of debt) looks totally unjustifiable. Compare to VTU who are on 8x earnings, net cash, below NTAV, dividend paying and making buybacks.

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[f15jcm] 02/11/2019 09:59

Accounts look fishy to me. They are presenting the level of debt through rose tinted glasses. They paid over £18m of interest last year. Clearly the level of borrowing is more than the £129m on the balance sheet. Looks like more debt is hidden in Other Current Liabilities. Kier did the same thing and came monumentally unstuck.