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LOOK Lookers Plc

0.00 (0.00%)
24 May 2024 - Closed
Delayed by 15 minutes
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 Shares Traded Last Trade
  0.00 0.00% 129.80 0.00 01:00:00
Bid Price Offer Price High Price Low Price Open Price
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Last Trade Time Trade Type Trade Size Trade Price Currency
- O 0 129.80 GBX

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Date Time Title Posts
05/10/202308:51Lookers with Charts & News3,217
19/1/202215:31Takeover time7
19/12/200711:21Why you should look at LOOKERS.PLC321
23/10/200723:51DOG BREATH6

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Lookers (LOOK) Top Chat Posts

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Posted at 27/7/2023 10:33 by lignum
Following on from Itisonlymoney's comments (he may have some valid points as this is obviously a very murky industry) Cinch would only block the deal if either (a) it expected a higher offer from elsewhere (US rumours etc) or (b) LOOK's value to Cinch / Constellation is worth more than 130p by virtue of how LOOK integrates into its own business model by being a distributor of BCA cars.

If (a) then happy days.

If (b) then Cinch / Constellation see the acquisition of LOOK as a threat as they may lose a major customer or have reduced pricing power which threatens BCA margins. Constellation probably aren't in a position to buy LOOK as they already own Marshalls, BCA and Webuyanycar. They are probably happy with the current situation but if they were to block higher bids this might invite some investigations into the competitive structure of the used car market. If Constellation are trying to corner the market by blocking competition bids hopefully someone somewhere might take notice.
Posted at 27/7/2023 10:02 by leadersoffice
Question is.... what does Cinch think ?My own feeling is there's more juice to be squeezed to get this to 140 or above then I think fair value has been achieved. Once the media get a quote from Cinch...share price will either go down or increase. 'There has been no announcement at this stage as to whether Cinch is happy with the increased offer from Global Auto Holding.Lookers said the new offer from Global Auto Holdings represents an increase of 8.3% to the previous recommended offer of 120p per Lookers share announced on June 20.'AM Online
Posted at 27/7/2023 09:25 by daveme
Interesting the market is not convinced the bid will succeed, with LOOK only trading around 124p. With only 11% of shareholders currently agreeing to the new offer and no word from Cinch it doesn't look great. However, if Cinch doesn't agree then it will mean they believe LOOK is worth more to either a new bidder or possibly themselves.

I'm not convinced 130p will be the knockout blow that some here think. Buckle up!
Posted at 26/7/2023 21:49 by gargoyle2
iTisOnlyMoney, you're clearly short LOOK at the moment, which is fine, each to his own. However, your comments about Constellation's motives, position in the market, reasons for not wanting to see LOOK get taken over, etc. don't seem to make sense to me when they clearly gave an LOI to vote in favour of a 120p deal. Unless they have had a change of corporate strategy since then, the only reason I can think of why they suddenly change their mind is that they think/know that a higher bid is on the way or they are hoping to extract a hugher price from the current bidder. (Surprised by the way that you weren't aware of the Constallation LOI -- it's all there in the RNSs.)

Good to see the share price rising towards the close today, with the court meeting scheduled for tomorrow.
Posted at 26/7/2023 18:04 by daveme
iIisOnlyMoney, in the RNS on 20th June announcing the bid, there was the statement:-

-- In addition to the irrevocable undertakings given by the Lookers Directors as set out above Bidco has also received letters of intent to vote in favour of the Scheme at the Court Meeting and the resolutions relating to the Offer at the General Meeting from Cinch Holdco UK Limited, Artemis Investment Management LLP, J O Hambro Capital Management Limited and Schroder Investment Management Limited each in the form described in Appendix III, in respect of 160,124,777 Lookers Shares, in aggregate, representing approximately 42.0 per cent. of Lookers' issued share capital as at the Latest Practicable Date.

Cinch clearly stated their intention of voting in favour of the deal.
Posted at 26/7/2023 12:14 by itisonlymoney
what's the outlook for car sales in the UK? is it similar to houses? everyone needs a home, and a lot of people need a car, but if finance costs are going up, cars get more expensive so people keep the car they've got for longer. leasing is a big driver of car volume but if we get a recession, will that slow down? imo, this could easily drop back to the 80s.

look at all the major holder notifications and the share price most are reducing long positions. jefferies is now fully hedged with shorts just ahead of long and can sell down its £9m holding without loss.
Posted at 26/7/2023 11:58 by riverman77
Bought in here as recent fall looks illogical - it's now only about 13% above where it was before the bid came in,

If the biggest shareholders rejected 120p they must either be aware of a higher bid coming in or strongly feel it's worth more than 120p. Even a modestly higher bid at 130p would translate to a 35% rise at current share price.
Posted at 20/7/2023 08:41 by daveme
Either Cinch agreed to the 120p bid in the hope it would flush out other bidders, which it clearly hasn't, or they are in discussions with another bidder and hence don't want the 120p bid to do ahead. In either case they clearly feel LOOK is worth more than 120p.

The market is probably of this view since the share price is yet to drop to the pre-bid price, or close to it.

Probably worth picking a few more up if the price drops close to £1.
Posted at 08/12/2022 11:22 by insanityideas
SMMT also show Tesla Model Y as having 3.1% of those total sales. As Tesla have a direct to customer sales model that is 3.1% of the market that Lookers cannot capture despite being a multi brand dealership.With other manufacturers looking at various options for direct to customer sales I think there is a threat of being cut out of a bigger proportion of new vehicle sales in the future as other companies follow the Tesla example. Although some of these models do still use dealers for delivery to customer it's not going to be as lucrative being the postman.20% of the market was also BEV in November, these vehicles have lower maintenance requirements which will be a hit to service revenue (historically a strong part of their income) over the next 5-10 years. Most manufacturers are still retaining a servicing package which as there are no consumable items (oil and filters) may turn out to be more lucrative in the short term until customers realise that they are being fleeced. - Tesla don't offer servicing, just fix on fail, comparison shoppers will notice this saving.These fundamental changes in the market are a more real threat to the business than unprofitable newcomers like cazoo... Difficult to quantify the impact to investors.Personally I got out of lookers once the share price recovered on takeover rumours earlier this year after holding through all the various scandals and share trading freeze... It's been a profitable investment for me, and as a previous lookers customer I do like the business, but I think these new threats until quantified better make it too risky a proposition regardless of opinion on company valuation verses share price. There is money in cars, but investing in it is tricky IMHO.
Posted at 01/3/2021 11:32 by jabers1
Investment case summary

▪ Following an extremely difficult period for Lookers over the last 18 months, we believe it is over the worst and is back on the road to recovery. While the market backdrop will remain challenging, we believe the Group is a position to move forward from the legacy issues and refocus on the strategic priorities for the future.

▪ The implied H2 2020 performance gives us comfort that the strategic plan and cost initiatives are working. Lookers announced an adjusted loss of £36m in H1 and is expected to be broadly break even in FY 2020E (we are forecasting a small loss of £1.0m). This implies a H2 profit of £34.5m, although we do acknowledge there was Government stimulus on costs (business rate relief and furlough) to support this outcome. We believe this improvement has not just come from annualised payroll savings of c.£50m but also lower investment in used car stock levels (c.£145m in H1 2020A from £240m in FY 2019A) as well as higher levels of stock turn running at 35-40 days vs. 55-60 days before.

▪ The near-term outlook is likely to remain challenging across the sector, albeit Lookers has used COVID-19 as a catalyst for significant change. Although new coronavirus infections and deaths falling rapidly in the UK and vaccination levels are progressing well, the roadmap out of lockdown 3 is cautious with motor dealerships not fully reopening until 12 April 2021. As a result, sales volumes in March – when the new 21 registration plate comes in – are still likely to be weaker than normal as restrictions are likely to be in place. That said, as we saw last year, once dealerships are allowed to be fully open, pent up demand could re-emerge post-March with data from Auto Trader pointing towards strong interest levels in new cars. Used car margins have remained strong in what we see as a supply constrained market.

▪ The shares have considerable asset backing, with property assets per share of 80.4p as at 30th June 2020 and net assets per share of 63.6p at the same date. Both figures are far
in excess of the current share price due to the company’s poor recent results and the lack of internal controls that led to the restatement of its 2018 figures and its run-in with the FCA.

▪ Lookers has already disclosed that net bank debt (which excludes IFRS 16 property leases and vehicle rental lease liabilities) was approximately £45 million at the end of 2020. This compares with £59.5 million at the end of 2019 and £11.0 million at the end of June 2020. Property lease debt was £135.8 million at 30th June 2010 and vehicle rental lease liabilities were £87.6 million giving total net debt of £234.4 million. In addition to this, the group had
a deficit on its defined benefit pension schemes of £69.5 million at the end of June 2019 and
the “subsequent events” section of its 2019 Annual Report (published on 30th November 2020) discloses that it will step up its deficit reduction payments from £9 million to £12 million
a year, we presume from 2021 onwards. There is a provision of £10.4m for the FCA fine on top of this as well. Consequently, there is no doubt that Lookers has high levels of leverage to contend with at present.

▪ To balance against these risks, we also look at the potential earnings upside if Lookers is able to navigate through this and indeed market conditions improve as we enter in 2022/23 and the impacts of COVID-19 start to recede. Looking further ahead, we believe Lookers is capable of re-emerging as a £5bn revenue group, driven in part by expanding its portfolio with Japanese brands following restructuring, as has been previously mentioned by the group. We have assumed a gross margin of 11.5%, with operating expenses as a % of revenue remaining below 10%. On that basis we can see Lookers achieving a PBT north of £60m, albeit the market would need to be in full recovery mode for this to be achieved. From an EPS perspective this would equate to 13.2p (vs. our 2022E forecast of 9.0p) and implies a P/E below 3.2x at current share price levels. To look at this another way, on a typical mid cycle P/E of 14x, this would equate to 184 per share.

▪ Based on our blue-sky EPS on Exhibit 1 and assuming a P/E multiple range of 8-14x, would suggest a value range of 105-184p per share. Our working (below) shows this analysis discounted back by 5 years to give range based on discount rates ranging from 5-20%. To get back to the current share price based on this analysis implies a mid-cycle PE of 10x discounted by 15%.
Lookers share price data is direct from the London Stock Exchange

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