AGM and IMS

RNS Number : 2412U

Lookers PLC

13 May 2008

 



13 May 2008

LOOKERS plc

AGM AND INTERIM MANAGEMENT STATEMENT

At today's Annual General Meeting of Lookers plc, Chairman Phil White will make the following statement:

'Whilst the trading environment for new cars is as challenging as expected, we continue to make progress given our diversified business model and with the positive impact of the Dutton Forshaw acquisition and the return of our Used Car Supermarket business to profitability.

Our Franchised Network Division earns its revenues from both new and used cars, and aftersales.  During the first quarter, our Northern Ireland business experienced tougher market conditions than the rest of the United Kingdom.  Although the national new car market was down only 1% in the first quarter, the Northern Ireland market was down 8%.  Our own new car sales in the Province were marginally ahead of that market and hence our total new car sales were down 5% on a like for like basis. 

Equally, used retail sales have been similarly adversely affected in Northern Ireland, but overall, our total used retail sales on a like for like basis were only 1% behind last year.  The impact of the recently acquired Dutton Forshaw franchises and our aftersales business has to a large extent offset the more challenging market conditions in Northern Ireland.

Our Used Car Supermarket businesses are benefiting from the operational changes we made last year, and as a result, the business is now trading profitably from a lower working capital base. 

 Our independent aftermarket parts division has made another strong start to the year.  This business, together with our franchised aftersales business, represented 54% of the Group's gross profit in 2007.  To support the growth of this business, we are in the process of relocating the Liverpool, Bristol and Glasgow branches of FPS to larger sites which we expect to complete by the end of the year.  The new Lucas contract to distribute lighting and mirror products throughout the UK is now operational across the FPS business.

Earlier this month, we completed the acquisition of the entire issued share capital of Bramall and Jones VW Limited for a total cash consideration of approximately £1.75 million and the assumption of debt of approximately £2 million.  The acquisition comprises two Volkswagen businesses and a contract hire and leasing business.  This increases our VW portfolio and provides us with an entry into the contract hire market with an experienced management team and a fleet of approximately 1,500 vehicles.

Overall we have started the current financial year with a much stronger business compared to last year, albeit we remain cautious about organic growth in new car sales within our franchise division.  However, the acquisitions of Dutton-Forshaw in the last quarter of 2007 and more recently the Bramall and Jones businesses, are expected to provide further growth in 2008.  These, together with the continuing investment in our independent aftermarket parts division, and the turnaround in the car supermarkets, will contribute positively to the outcome in the current year.

We are clearly mindful of the current uncertainties within the UK economy but provided there is no further significant deterioration in the economy, we are still confident of delivering another year of growth in 2008 in line with market expectations. 

Enquiries:

Lookers plc Ken Surgenor, Chief Executive David Dyson, Finance Director	Telephone: [phone]
Hudson Sandler Andrew Hayes/Nick Lyon/Kate Hough	Telephone: [phone]

 

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