Interim Management Statement

RNS Number : 1174N

Lookers PLC

14 May 2015

 

14 May 2015

INTERIM MANAGEMENT STATEMENT

Lookers plc, ("Lookers" "the company" or "the group"), one of the leading UK motor retail and aftersales service groups, issues its interim management statement for the period from 1 January 2015 to 13 May 2015, which shows a strong performance in the period and continued margin improvements in all areas of the business.

Unless otherwise stated, the figures in this statement relate to the quarter ended 31 March 2015.

The company produced a strong trading performance in the quarter to 31 March 2015, particularly during the important month of March and the Board is very pleased to yet again report a record result for the period. This positive result was a healthy improvement on the corresponding period in 2014. 

Our motor division delivered another creditable performance in the period with gross profit from new retail cars increasing by 4% and new car retail margins also ahead of the prior year. As referred to in our 2014 annual report, we have recently increased our focus and investment in the fleet sector where gross profit from new fleet cars increased by 12% and margins were maintained at a similar level to last year.

Gross profit from used cars increased again during the period continuing the trend of recent years. Used car margins also improved, resulting in an increase in gross profit of 10% compared to the prior year. We continue to focus on stock management and sourcing good quality used cars, both of which help improve volumes and margins. A further factor which continues to improve used car volumes is the increasing number of leads being generated from our website, which has recently been significantly upgraded and which will benefit from further major developments to continually enhance our online presence.

As well as improving the margin, our aftersales business increased turnover by 7% compared to 2014, benefitting from the growth in the vehicle parc of cars under three years old. This trend will continue due to the increase in the new car market over the last three years. Gross profit from aftersales increased by 9% compared to the prior year. The increase in volumes and margins is also a result of the various initiatives that we have made in recent years to develop the aftersales business, in particular the increasing proportion of our customers who choose to enter into service contracts, which continues to improve customer retention.

Our independent parts division made good progress in the period with increases in both turnover and profit before tax compared to the prior year, against a background of an improving but competitive market. Margins were maintained at a similar level to the prior year and careful control of overheads resulted in a satisfactory increase in profit before tax.

Cash flow continued to be strong during the period and was significantly higher at both the operational and net cash flow levels compared to budget, whilst the ratio of net debt to EBITDA remains well below 1.0. With low gearing and high levels of unutilised bank facilities, the group has a significant amount of additional funding capacity.

Outlook

The group has made a good start to the year with excellent results for the first quarter from both the motor and parts divisions. The balance sheet continues to be strengthened by strong operational cash flow and positive working capital management and we have substantial headroom in our bank facilities. This provides financial security as well as funding capacity to help develop the business through further strategic acquisitions in both the motor and parts divisions.

The financial performance of the group in the three month period builds on what was already a strong comparative in the previous year. We therefore believe that the results for the year ending 31 December 2015 should be in line with current market expectations. 

For further information:

Lookers plc	Telephone: [phone]
Andy Bruce, Chief Executive
Robin Gregson, Finance Director
Tavistock Communications	Telephone:  [phone]
Keeley Clarke, Emma Blinkhorn, Matt Ridsdale

 

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