Interim Management Statement

RNS Number : 2113V

Lookers PLC

29 October 2010

 



Lookers plc

Interim management statement

Lookers plc, one of the leading UK motor retail and aftersales services groups, is issuing an interim management statement for the period from 1 July 2010 to 28th October 2010.

The strong trading performance delivered in the first half of the year has continued into the third quarter and we are pleased to report that trading during the quarter ended 30 September 2010 and particularly during the critical month of September, has remained strong. Consequently group results for this period and the nine months are ahead of both budget and the prior year.

Our market leading independent parts division, which makes a significant contribution to group earnings, has delivered further improvements in profitability and continues to trade ahead of management expectations and last year.

The motor division has also continued to deliver trading results ahead of budget and the prior year and has benefited from new vehicle volume sales growth in excess of the 7.8% increase in the UK new car market. We continue to make further progress in refining our franchise portfolio and have recently closed or sold five underperforming businesses to realise cash, which we will invest in new businesses that offer the opportunity of a greater return on capital.

Used car volumes increased by 8% in quarter three, compared to last year and margins continue to be at satisfactory levels. Aftersales revenue in the motor division continues to show good growth, up 2% where the overall market has been declining, with satisfactory margins.

Working capital continues to be carefully controlled with a corresponding reduction in interest charges which, together with the strong operating performance from both divisions and continued focus on costs will, we believe, enable the group to deliver a strong result for the year.

Outlook

The new and used car retail markets are likely to continue to be affected whilst consumer confidence is subject to wider economic factors, although the aftersales bias to our motor division and the strong performance throughout the year, demonstrate the strength of the business and leaves us well positioned for future growth.

Our independent parts distribution business remains a key differentiator for Lookers in the retail motor sector. It provides a counter cyclical hedge against economic challenges to the motor division and, given its significant contribution to group profitability, gives us a unique position of strength in the sector.

Both operating divisions have delivered excellent results for the nine months and we are therefore very confident that the results for the financial year to 31 December 2010 should exceed management expectations. Our strong balance sheet and headroom in our bank facilities also enables us to pursue strategic acquisition opportunities in both the motor and parts divisions, which will help underpin growth in future years.

Commenting on the statement, Peter Jones, Chief Executive said:

 "We are pleased with the strong trading performance in the third quarter, which follows the excellent result for the first half of the year. Whilst market conditions remain challenging, the strong performance from both the parts and motor divisions, combined with our reduced cost base and strengthened balance sheet, give us confidence that we will continue to trade successfully for the rest of the year and be able to take advantage of growth opportunities which may arise in 2011 and beyond."

For further information:

Lookers plc	Telephone: [phone]
Peter Jones, Chief Executive
Robin Gregson, Finance Director
Hudson Sandler	Telephone [phone]
Nick Lyon / Kate Hough

 

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