Interim Results

Lookers PLC
30 August 2001

                                                                30 August 2001

                                 LOOKERS PLC

           INTERIM RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2001



HIGHLIGHTS

Lookers plc is a leading national operator in the UK's retail motor industry.



Record results have been achieved for the half-year including:-

*        Turnover up 26% at £374m (2000: £298m)

*        New car sales increased by 41%

*        Used car sales retail increased by 32%

*        Operating profit up 33% at £8.5m (2000: £6.4m)

*        Profit before taxation up 30% at £6.5m  (2000: £5.0m)

*        Earnings per share up 34% at 11.8p (2000: 8.8p)

*        Dividend up 9.6% at 2.85p (2000: 2.6p)





Commenting on the outlook for the Group, Fred Maguire, Chairman, said:



'The Board is pleased to report substantial growth and increased profits to
build on our strong performance in the previous financial year.  The Group has
a clear strategy and talented management team to exploit the more stable
trading environment and take advantage of the structural changes this industry
faces in the next 18 months'.



Enquiries:

Fred Maguire, Executive Chairman

Allan Marston, Finance Director

Telephone :     [phone] (on Thursday 30th August 2001)

                0161 291 0043 (thereafter)

Andrew Hayes/Penny Davis, Hudson Sandler: 020 7796 4133.



An analyst briefing will be held today at 09.30 at the offices of Hudson
Sandler, 29 Cloth Fair EC1A.



CHAIRMAN'S REVIEW



INTRODUCTION

Lookers strategy of investing in our business to win customers for life
continues unabated and again has helped produce record results for the
half-year.  Group sales continue to grow well ahead of the market with strong
profit growth on a like for like basis.  The tough market environment,
particularly in the second half of last year has been stabilised leading to
much more positive market conditions.



FINANCIAL

We achieved a very significant 47% increase in new car sales across our
mainland dealerships including new acquisitions - the national car market
increased by 4.3% during this same period.  Our total turnover for the
half-year amounted to £374million (£298million for the half-year ended 30th
June 2000).



Operating profit rose by 33% to £8.5m (£6.4m for the comparable six month
period) with EPS rising by 34% to 11.8 pence.



Our agricultural machinery division has operated in a very difficult climate
following the outbreak of foot and mouth disease.  Despite these difficult
trading conditions the business has achieved close to a breakeven position in
the first half compared with a loss of £287,000 during the same period last
year.



Profit before taxation was £6.5m for the six month period which exceeds the
profit before taxation for the full 12 months in the Year 2000 and represents
an increase of 30% on a like for like comparison with the same trading period
last year.



Despite our acquisitions of new dealerships and continued investment in our
re-franchising programme gearing was held at 63% on net assets of £73m.







DIVIDEND

The Board of Directors is recommending an interim dividend of  2.85p per
ordinary share.  This reflects the Board's confidence in the future outlook
and will be reviewed again at the final stage.



CAR MARKET

On a national basis, year to date car sales reached 1,269,028 new
registrations, an increase of 4.3% over the same previous period.  The market
has been driven strongly by private buyers, accounting for an 18.8% increase
in this sector.



We have seen reductions in the prices of new cars in response to the various
pressures in the market place and the DTI order.  This has brought a more
stable trading environment and less volatility in the valuation of used cars.
We continued to be affected by repurchases at fixed prices on the Motability
Scheme, but an end is in sight, as liabilities under the old scheme come to an
end in February 2002.



September 2001 will see the introduction of a new registration plate system.
Two letters will signify the area in which the car is registered followed by
the month and year of registration with the remaining three letters being
random.  With strong demand for new cars, a national market of over 400,000
units has been forecast for the month.



This new system, following on from the twice-yearly prefix changes helps to
spread new car volumes over the peak periods, which will in turn assist both
manufacturers and dealers in maintaining stock at lower levels.



Block Exemption expires in September 2002.   We are of the opinion that the
most likely outcome is that it will be renewed in a modified form which will
benefit us as one of the major retailers in the motor sector and consolidate
our position with our manufacturing partners.



OPERATING REVIEW

Performance

We continued to advance on our strategy of improving customer focus in all
areas of our business.  Overall the mainland motor dealerships have seen a
significant improvement over the comparable period.



Our mainland new car sales for the half-year increased by an impressive 47%
over the same period last year, with used car sales retail increasing by 43%
including new acquisitions.  This changing demand pattern can be attributed to
the fact that new cars became more affordable following the price reductions.
In addition, as UK prices have reduced, the price advantage from sourcing cars
from countries with high indirect taxation has diminished.



Our Northern Ireland new car sales for the half-year also increased by a
significant amount - 34% in a market which was down by 3%. This enabled
Charles Hurst to produce a record result which was well ahead of the previous
period and ahead of budget.  The Prentice business which we acquired last year
has now been successfully integrated into the Group.



Refurbishment

The Liverpool Vauxhall dealership has now been rebuilt and the site is being
developed to accommodate the Saab franchise as well as the Customer Management
Centre.



In Belfast, our specialist car franchises have recently been separated from
the Jaguar franchise which will provide additional space for the recently
introduced Jaguar 'X' type and will enable us to provide a greater focus both
for Jaguar and specialist cars.



Our accident repair business has been relocated into separate premises in
Belfast since the half-year end creating additional prime retail space for the
development of a new Renault/Nissan facility at our main Boucher Road motor
village.

Acquisitions

During the period we added a further 3 outlets to the Group with a total cost
approaching £3m.  These investments were made with our preferred partners and
all complement our representation in areas across the country.



In May a Renault dealership in Chester was purchased on the prominent Sealand
Road situated adjacent to land already purchased by the Group for the
relocation of the Vauxhall depot.  This acquisition extends our Renault
coverage in Cheshire and a satellite operation has been added in Macclesfield.



In June we have also purchased the Broadfields Land Rover business in Bishops
Stortford adding to our existing dealerships in the South East, which have
performed particularly well during the period.



The recent purchase after the half-year end of three Honda dealerships takes
Lookers into Nottingham and Derby, areas where we have previously not been
represented. These Honda businesses had an annual turnover of £22m and we
expect to see the benefits of the acquisitions during the second half of the
year.



Customer Focus

We continue to place great importance on our staff and our employee
development programme is part of our management culture to help encourage
personal skills and create employees and customers for life.  Our Customer
Management Centres have been expanded to include the South East and Northern
Ireland.



Our training initiatives have again been recognised with the Gold Award being
presented to us at the Motor Industry Trade Awards for our training scheme to
help   young people qualify as 'customer friendly' Fast-Fit technicians.




e-commerce

Our award winning website www.lookers.co.uk continues to develop, attracting
new customers to our dealerships and allowing access to Group stock.  Our
policy of integrating Internet operations with traditional retailing is
proving successful.



The site enables us to widen our sales area and we supply many vehicles to
areas where we have no dealership representation.  Our customers welcome the
personal contact that we make at an early stage in the sales process and a
significant proportion of customers visiting our dealerships have been
attracted through our website.



MANAGEMENT STRUCTURE

The Group has realigned its reporting structure onto a franchised as opposed
to a regional basis.



This restructuring will enable us to strengthen our relationship with
important strategic manufacturer partners as the industry adapts to change. It
is clear the key to future success will be a closer understanding and trust
between car retailer and manufacturer.



The operational structure reporting to the Group Managing Director, Ken
Surgenor is now as follows:-



Mark Kass, Operations Director, will have responsibility in England for
Renault, Nissan, Toyota, Land Rover, Mercedes-Benz, Seat and Suzuki.



Brian Schumacker, Operations Director, will have responsibility in England for
Vauxhall, Volkswagen, Audi, MG Rover, Chrysler-Jeep and Honda.



Andy Bruce remains Operations Director for Charles Hurst Group in Northern
Ireland.



OUTLOOK

Confidence has returned to the new car market place with nine consecutive
months of growth in new car retail sales.  The market has been driven strongly
by private buyers with sales in this sector up 18.8%.



The second half of the year has started strongly with July new car sales up
11.6% on the same month last year.  As a result of the strong demand for new
cars combined with the introduction of the first new registration plate system
in over 20 years we anticipate an even stronger September - at this stage our
orders are running well ahead of last year.



The Group has a clear strategy and talented management team to exploit these
opportunities and the more stable trading environment.  We are in good shape
for the future and poised to take advantage of the structural changes this
industry faces in the next 18 months.



                                                                   F S Maguire

Executive Chairman

                                                              30th August 2001



Lookers plc



The Directors announce the following unaudited results of the Group for the
half-year ended 30 June 2001



Consolidated Profit and Loss Account (Summarised)

                                           Half-year    Half-year          Year 
                                               ended        ended         ended
                                             30 June      30 June   31 December
                                                2001         2000          2000
                                         (Unaudited)  (Unaudited)     (Audited)
                                                £000         £000          £000


Turnover                                     374,437      297,865       582,529

Operating Profit                               8,522        6,449        10,105



Loss on closure/sale of
continuing operations                             -            -          (329)
Profit before interest                         8,522        6,449         9,776
Interest payable                               1,996        1,420         3,266

Profit on ordinary
activities before taxation                     6,526        5,029         6,510

Taxation                                       1,958        1,509         1,820

Profit after taxation
attributable  to
shareholders                                   4,568        3,520         4,690

Dividends - preference shares                    584          585         1,168
          - ordinary shares                      965          868         2,912


Earnings per ordinary                          11.8p         8.8p         10.5p
share






Lookers plc

Consolidated Balance Sheet (Summarised)


                                           30 June     30 June     31 December
                                              2001        2000            2000
                                       (Unaudited) (Unaudited)       (Audited)
                                              £000        £000            £000
FIXED ASSETS

Intangible assets                            9,536       9,828           9,879
Tangible assets                             84,950      68,937          80,719

                                            94,486      78,765          90,598

CURRENT ASSETS

Stocks                                      59,518      59,968          60,644
Debtors                                     47,336      39,714          29,574
Cash at bank and in hand                        34          30           3,258

                                           106,888      99,712          93,476

CURRENT LIABILITIES

Bank overdraft                              10,898      15,559          12,923
Trade creditors                             50,814      46,758          38,965
Other creditors                             40,475      29,862          28,044
Proposed dividend                              965         868           2,032

                                           103,152      93,047          81,964

Net current assets                           3,736       6,665          11,512


Total assets less current liabilities       98,222      85,430         102,110
Long term liabilities and provisions        24,893      13,972          31,800

Shareholders' funds                         73,329      71,458          70,310


Shareholders' funds are attributable to
 Non-equity shareholders' funds             14,591      14,591          14,591
 Equity shareholders' funds                 58,738      56,867          55,719


                                            73,329      71,458          70,310
                                             
Total borrowings                            46,350      29,575          47,322


Gearing                                        63%         41%             67%





Lookers plc

Consolidated Cashflow Statement (Summarised)
                                                         

                                           Half-year    Half-year          Year 
                                               ended        ended         ended
                                             30 June      30 June   31 December
                                                2001         2000          2000
                                         (Unaudited)  (Unaudited)     (Audited)
                                                £000         £000          £000


Net Cash Inflow from
Operating Activities                          11,338        2,553         4,079
 
Interest paid                                 (1,976)     (1,420)       (3,294)


Non-equity Dividends Paid                       (584)       (585)       (1,168)

Taxation paid                                   (126)       (438)       (1,229)

Net Cash Outflow from
Capital Expenditure and
Financial Investments                         (4,138)        (63)       (2,046)

Net Cash Outflow from
Acquisitions and Disposals                    (1,514)          -        (7,056)

Equity Dividends Paid                         (2,032)     (1,886)       (2,766)

Net Cash (Outflow)/Inflow
from Financing                                (2,167)     (2,387)        15,118
 

(Decrease)/Increase in cash                   (1,199)     (4,226)         1,638





Lookers plc


Notes



1.         Dividends


(a)        Ordinary shares of 25p

The interim dividend proposed at the rate of 2.85p per share (2000 - 2.6p per
share) is payable on 30 November 2001 to shareholders on the register at the
close of business on 2 November 2001.


(b)        8% Cumulative redeemable preference shares of £1 each

The preference dividend of 4.0p per share (2000 - 4.0p per share) was paid on
31 March 2001. The next preference dividend is payable on 28 September 2001 to
preference shareholders on the register at the close of business on 14
September 2001



2.         Earnings per share



The earnings per share is based on profit on ordinary activities after
taxation and preference dividends calculated on a weighted average of
33,867,560 ordinary shares in issue during the period (2000 - 33,380,730)



3.         Comparative Figures



The accounts for the year ended 31 December 2000 are not full accounts. A copy
of the full accounts for that period, on which the Auditors have issued an
unqualified report, has been delivered to the Registrar of Companies.





The accounting policies adopted for the half-year ended 30th June 2001 are
consistent with those used for the year ended 31st December 2000.



4.         Interim Statement



The interim statement will be posted to ordinary and preference shareholders
today. Copies will also be available to the public at the registered office of
the company at 776 Chester Road, Stretford, Manchester M32 OQH



Executive Directors



F S Maguire, M Sc        - Executive Chairman

H K Surgenor             - Managing Director

A S Marston, F.C.A       - Financial Director

D J Blakeman, LL.B       - Secretary

B Schumacker             - Operations Director

M J Kass                 - Operations Director





Non-Executive Directors



C McKinney                 - Deputy Chairman

G J Morris

G Ryan

D O'Connor                 - (Alternate to C McKinney)

N Clyne                    - (Alternate to G Ryan)





Registered Office



776 Chester Road

Stretford

Manchester

M32 OQH

Telephone :                   0161 291 0043

Website:                      www.lookers.co.uk





Registrars and Transfer Office



Northern Registrars Limited

Northern House

Penistone Road

Fenay Bridge

Huddersfield

HD8 OLA

Telephone : [phone]