Interim Results

RNS Number : 2312R
Lookers PLC
18 August 2010
 



 

 

 

18 August 2010

 

LOOKERS plc

 

UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2010

 

Lookers plc, one of the leading UK motor retail and aftersales services groups announces its results for the six months ended 30 June 2010.

 

Commenting on the results, Lookers Chief Executive Peter Jones said:

 

"We are pleased to announce that we have delivered a record trading performance in the first six months of 2010, despite difficult market conditions and we are very encouraged by this result. The strong performance from both the Parts and Motor Divisions, a reduced cost base together with significant positive operational cashflow which has strengthened the balance sheet, give us confidence that we can continue to grow the business, deliver successful results for the full year and be in a position to pursue strategic growth opportunities as they arise."

 

Financial Highlights

 

·      Revenue increased by 13.5% to £988.3 million (2009: £870.4 million)

·      *Adjusted  operating profit increased by 14% to £29.8 million (2009: £26.1 million)

·      Underlying operating margin of 3.0% (2009: 3.0%)

·      *Adjusted profit before tax increased by 29% to £22.7 million (2009: £17.6 million)

·      Profit before tax increased by 149% to £21.4 million (2009: £8.6 million)

·      Basic earnings per share increased to 3.94p (2009: 2.82p)

·      Operational cashflow increased to £32.1 million (2009: £2.2 million negative)

·      Net cashflow increased to £19.4m (2009: £2.1 million)

·      Net debt reduced by £24.4 million to £54.6 million (2009: £155.0 million)

·      Gearing reduced to 32% (2009: 202%)

 

Operational Highlights

 

·     Resilient performance against a challenging market environment

·     Strong performance from our market leading independent aftermarket parts division

·     Product ranges expanded

·     Profit before tax increased by 13%

·     Strong performance from the motor division

·     New car sales increased by 26% (like for like)

·     Improved performance from aftersales

·     Dual franchised a further 5 businesses

·     The Group is well positioned to take advantage of economic recovery

 

*Adjusted before amortisation of intangible assets, exceptional items and debt issue costs.

 

Enquiries:

 

Lookers

Telephone:  0161 291 0043

Peter Jones, Chief Executive


Robin Gregson , Finance Director




Hudson Sandler

Telephone:  020 7796 4133

Nick Lyon/Kate Hough


 

 

Interim Management Report

 

INTRODUCTION

Following the strong result for 2009, I am very pleased to report that Lookers has delivered a record trading performance for the first six months of 2010, ahead of market expectations, with Group like for like sales outperforming the UK motor retail market. These results should be considered against the background of the difficult trading conditions in this market, which started in 2008 and have continued since then, as well as difficult general economic conditions across the UK. The Group's performance, therefore, represents a significant achievement against this challenging environment and is an encouraging first half performance which gives your board confidence that we can deliver a successful result for the full year.

 

The UK new car market has recovered strongly with registrations increasing by 20% in the six month period compared to the previous year, with total registrations of 1.1 million. The market benefited from the Government scrappage scheme which was introduced last year and ended in March 2010 and added 107,364 registrations in the reporting period. Group like for like new car sales increased by 26% to 32,469 units as we continue to increase our market share. Used car values stabilised during the period after the strong recovery in values in the previous year and like for like sales volumes of used cars decreased by 6%, with the majority of the reduction resulting from the adverse weather conditions in January. However, used car margins in terms of profit per unit, were slightly improved on those for 2009.

 

Our franchise aftersales revenue showed good growth, up 2%, continuing to gain market share in a market where the number of vehicles under three years old continues to reduce.

 

Our independent parts division, which provides a significant contribution of over 30% to group profits, had another excellent performance and produced record levels of operating profit. The Parts Division is of particular importance to the group as it is not subject to the fluctuations that can occur in the new car market and therefore generates earnings which are more resilient. Furthermore, as the national market leader in this sector of the market, we are in a strong position to exploit future growth opportunities through the introduction of new products and services.

 

Although the UK economy appears to be moving out of recession and showing signs of modest growth, economic conditions continue to be influenced by concerns over the financial health of the country and consumer confidence. However, our strong performance in both 2009 and the first half of this year demonstrate the resilience of the Group's businesses, which are underpinned by profits generated by dealership aftersales and the independent parts division. Furthermore, the capital structure of the Group has been significantly improved and the business is now generating significant levels of free cashflow. This improved financial position has enabled the company to recommence a progressive dividend policy, further details of which are set out below.

 

 

FINANCIAL REVIEW

Turnover increased by 13.5% to £988.3 million and *adjusted operating profit increased to £29.8 million from £26.1 million last year, which represents a margin of 3.0%. Following further reductions in working capital, interest costs reduced by 16.5% to £7.1 million. The operational interest charge, which excludes interest on pension scheme liabilities, reduced by 9.6% to £6.6 million. *Adjusted profit before tax increased to £22.7 million which, as noted above, is a record result for the group and compares to an *adjusted profit of £17.6 million last year. This is an increase of 29% over what was, in itself, a very strong result in the 2009 half year. *Adjusted earnings per share, as disclosed in note 7, were 4.3p compared to 5.89p in the previous period. The reduction in the adjusted earnings per share reflects the impact of the additional shares issued as part of the share issue in July 2010. Adjusting for the impact of the share issue, the adjusted earnings per share for the prior period would have been 3.2p**, an increase of 34%. After a tax charge of £6.3 million, which represents an effective tax rate of 30.1%, profit after tax was £15.1 million, compared to £5.9m in 2009, an increase of 156%.

 

It is pleasing to comment that there are no exceptional items in the period compared to £7.7 million in 2009, which related to refinance and restructuring costs. Cashflow for the six months was particularly strong and significantly improved compared to the prior year with cash generated from operations of £32.1 million compared to cash absorbed of £2.2 million last year. Net cash inflow for the period was £19.4 million compared to £2.1 million in 2009. Following the strong cashflow in the period, the balance sheet has been further strengthened, with net borrowings of £54.6 million compared to £79.0 million at the start of the year and £155.0 million at 30 June 2009. This has reduced gearing to 32% compared to 49% at the start of the year and 202% at 30 June 2009. Furthermore the ratio of net debt to EBITDA has now reduced to below 1.0. A further indication of the strength of the balance sheet is the value of freehold and long leasehold properties which was £180.0 million at the end of the period and remains a key strength of the business.

 

(*Adjusted before amortisation of intangible assets, exceptional items and debt issue costs.

**This calculation is based on * Adjusted earnings and a weighted average number of shares in issue of 383,526,765, which represents the weighted average number of shares in issue during the prior period as adjusted for the shares issued in the share issue.)

 

DIVIDEND

I am pleased to announce that given the encouraging results and strong financial position of the Group, the Board intends to pay an interim dividend this year of 0.6p per share. This represents the restoration of a progressive dividend policy which was previously followed by the company until the difficult trading conditions in 2008. The dividend will be payable to shareholders in November 2010 and we also intend to pay a final dividend to shareholders, although the payment of any future dividends will be subject to satisfactory trading results.

 

BOARD CHANGES

As announced on 1 March 2010, as part of a reorganisation of the board, Andy Bruce was appointed Managing Director of the Motor Division and Brian Schumacker stood down from the board but remains with the company in an important new role as Operations Director for business development. I am pleased to report that both Andy and Brian are making good progress in their new roles, which is demonstrated by the successful results of the Motor Division.

 

 

OPERATING REVIEW

 

Motor Division

Our Motor Division consists of 122 franchise dealerships representing 32 marques from 76 sites. The business generates revenue from the sale of new cars, the sale of used cars, vehicle servicing and repair, and the sale of franchise parts. I am pleased to report that in the first six months of this year the Motor Division increased *adjusted profit before tax to £18.5 million from £15.3 million in 2009.

 

During the half year we have added five further franchises to existing locations, which will improve turnover per site with a minimal increase in fixed costs thereby improving economies of scale and profitability. We are also adding a new Ford dealership in South Sheffield, to increase our representation in this part of the city which will complement our existing Ford business in North Sheffield. I am also pleased to announce that we have agreed terms with Audi to operate their franchise in South Dublin with the development of a flagship Audi brand centre in the city. This should start trading in the final quarter of this year and although it will take time to achieve profitability, we consider that this will be a very profitable business in the medium term. This is our first Audi business and represents an important strategic addition to our portfolio.

 

New Cars

The new car market increased by 20% to 1.1 million cars in the period, which included vehicles sold under the government scrappage scheme. Group new car sales of 32,469 cars increased by 26% compared to 2009 levels and were therefore 6% ahead of the UK market, improving our market share to 2.9% from 2.8% in 2009.  Within the new car market sub sectors, our share of the private retail sector is now 4.4%, our share of government scrappage sales, which resulted in some dilution to our overall share of the market, was 2.0% and our share of the company car sales sector is 2.0%. We will continue to focus on improving our market share in both the retail and corporate sectors.

Gross margins on new cars reduced to 10.2% (2009: 10.6%), due to the effect of margin dilution from sales under the Government scrappage scheme, along with an increase in corporate sector sales and an increase in average selling prices. However, profit per retail unit remains at satisfactory levels.

 

Used Cars

Group sales of 21,954 vehicles reduced by 6% compared to 2009 levels and the majority of this shortfall resulted from the adverse weather conditions in January. Gross margins remained stable in terms of profit per vehicle but due to an increase in average selling prices, as used car values recovered, average margins reduced to 10.1% from 10.6%.

The used car market, which has annual sales of circa 7 million vehicles, remains a huge area of opportunity for the Group. Through improved sourcing and a broader stock mix on our forecourts, we expect to take advantage of the stable market conditions in the used car sector to improve volumes and make further improvements in gross margin.

 

Aftersales

The aftersales business in the motor division continues to grow, despite a declining vehicle parc within the 1 to 3 year vehicle sector. The group improved like for like aftersales revenue by 2% and had similar gross margin levels to last year at 41%. This resulted in the further strengthening of dealership aftersales profitability and further improved our share of the aftermarket opportunity.

Our continued aftersales growth has been underpinned by further improvements in our customer relationship marketing centre processes and the deployment of electronic health checks in all businesses. This enables us to identify and optimise service and repair requirements on all vehicles visiting us for aftersales work. We have also introduced service plans for both new and used vehicles and a Lookers warranty scheme. All these initiatives, combined with our determination to deliver excellent customer service, are key factors in strengthening and optimising customer retention so that we can continue to grow our share of the aftersales market.

 

Parts Division

Following a record year in 2009 our independent aftermarket parts division has continued to perform significantly ahead of last year and is heading for another record performance. The Parts Division operates through three companies, each supplying hard parts to the independent aftermarket, the customer base being primarily motor factors who, in turn supply the independent repair sector.

The total vehicle car parc in the UK market is over 30 million vehicles, with just over 6.5 million of these being in the conventionally, dealership dominated 1 to 3 year vehicle parc.  In contrast to the younger vehicle parc, the 4 year plus vehicle parc in the UK continues to grow and the outlook for our independent parts operations is good as each of the businesses continues to take an increased share of a growing market opportunity.

 

Turnover for the division increased by 19%, operating profit increased by 13% and *adjusted profit before tax increased by 14%, from £6.1 million to £6.9 million. The business continues to benefit from the growth of the four year plus vehicle parc as customers choose to maintain and retain their vehicles. 

 

FPS, the only national distributor of quality branded automotive hard parts delivered strong results with turnover increasing by 19% and profit before tax increasing by 21% to £5.2 million. Growth was also supported by the introduction of new product lines and further growth from product lines introduced last year, whilst efficiency benefits were achieved by an increase in electronic order capture and information exchange.

 

Apec Braking, the market leader in the UK for 'dry' braking (pads and discs) increased turnover by 15%. However margins were under pressure due to the weakness in sterling in the earlier part of the year, and profit before tax reduced to £0.95 million from £1.1 million. Margins have since improved due to resourcing certain products and the improved strength of sterling, such that performance in the second half should deliver satisfactory full year results.

 

BTN, a leading supplier and provider of technical support and servicing of turbochargers delivered another excellent performance in the first half. Turnover increased by 28% and profit before tax increased by 13%, with increased sales to motor factor groups and numerous specific customer prospects in the pipeline to support further growth.

 

 

OUTLOOK

Since the end of the half year, Lookers has continued to outperform the new car market and trading across the Motor Division is ahead of budget. The independent parts division continues to perform well and is showing further significant year on year progress in a market where there are significant growth opportunities.

 

The new and used car retail markets are likely to continue to be affected whilst economic conditions remain uncertain, although the aftersales bias to the motor division and the strength of the parts division, helps to reduce the financial impact of this. There continues to be some recovery in the corporate new car markets and there are further benefits in terms of cost savings which can be achieved. We believe these factors will help the Motor Division to deliver another successful result for the year.

 

The Parts Division is a key factor that differentiates Lookers from competitors in the retail motor sector and provides a high quality earnings stream that is subject to less fluctuations in the demand for new and used cars. Importantly, it continues to deliver further growth in profitability and we are confident that it will produce a strong result for the year.

 

The factors that created exceptional charges in 2009 are now behind us, ensuring that profitability and cashflow are not eroded. The strong cashflow demonstrated in the half year has strengthened the balance sheet and the low level of gearing, together with the strong operational performance, therefore allows us to take advantage of selective acquisition opportunities to further improve our franchise representation and add additional complementary businesses to the Parts Division.

 

I would like to conclude by thanking all our people at Lookers for their hard work and dedication in what continues to be a challenging year and without whom we would not have been able to deliver such an excellent result.

 

 

 

Phil White

CHAIRMAN

18 August 2010

 

 

 

 

 

Responsibility Statement

WE CONFIRM THAT TO THE BEST OF OUR KNOWLEDGE

 

(a)           The interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting'.

(b)           The interim financial statements include a fair review of the information required by DTR 4.2.7R

                (identification of important events during the first six months and description of principal risks and

                uncertainties for the remaining six months of the year); and

(c)           The interim financial statements include a fair review of the information required by DTR 4.2.8R

                (disclosure of related parties' transactions and charges therein).

 

 

 

 

By order of the Board

 

 

Peter Jones                                         Robin Gregson

Chief Executive                                    Finance Director

18 August 2010                                   18 August 2010

 

 

 

 

 

  

 

Consolidated Income Statement

Six months ended 30 June 2010

                                                                                                                                                   



Unaudited

Six months ended

Unaudited

Six months ended

Audited Year ended



30 June

30 June

31 Dec



2010

2009

2009


Note

£m

£m

£m






Continuing Operations





Revenue

3

988.3

870.4



Cost of sales


(850.7)

(744.1)



Gross profit


137.6

126.3

Distribution costs


(69.9)

(71.8)

Administration expenses


(38.7)

(37.0)

Other operating income


0.1

0.1

Profit from operations


29.1

17.6



Profit from operations before amortisation


and exceptional items


29.8

26.1

Amortisation of intangible assets


(0.7)

(0.8)

Exceptional items

5

-

(7.7)



Profit from operations


29.1

17.6



Net interest on pension schemes


(0.5)

Interest payable

6

(6.7)

(7.4)

Interest receivable

6

0.1

0.1

Net Interest


(7.1)



Exceptional interest payable on closed businesses


-

Fair value on derivative instruments


-

Debt issue costs


(0.6)

(0.2)

Profit on ordinary activities before taxation


21.4



Profit before tax, amortisation,


exceptional items and debt issue costs


22.7

17.6

Amortisation of intangible assets


(0.7)

(0.8)

Total exceptional items


-

(7.7)

Fair value on derivative instruments


-

(0.3)

Debt issue costs


(0.6)

(0.2)



Profit on ordinary activities before taxation


21.4

8.6



Tax charge

8

(6.3)

(2.7)

Profit for the period


15.1

5.9



Continuing operations


Earnings per share


Basic earnings per share

7

3.94p

2.82p

Diluted earnings per share

7

3.85p

2.82p

                                                                                                                                                                                                      

 

 

 

 

 

 

Consolidated Statement of Comprehensive Income

Six months ended 30 June 2010



 

Unaudited

Six months ended

30 June

2010

£m

 

Unaudited

Six months ended

30 June

2009

£m

 

Audited Year ended

31 Dec

2009

£m






Actuarial losses recognised in post


retirement benefit schemes


(5.9)

(17.2)

Movement on deferred taxation on pension liability


1.2

4.8

Fair value on derivative instruments


(1.5)



Net losses recognised directly in equity


(6.2)

(12.2)



Profit for the period


15.1

5.9

Total comprehensive income for the period


8.9

(6.3)

 

 

  

 

 

  

 

 

 

Consolidated Balance Sheet

30 June 2010

 


Unaudited

Unaudited

Audited


30 June

30 June

31 Dec


2010

2009

2009


£m

£m

£m





Non current assets

Goodwill

44.8

44.8

Intangible assets

16.3

17.7

Property, plant and equipment

192.4

205.3


253.5

267.8


Current assets

Inventories

287.0

208.6

Trade and other receivables

160.9

113.6

Cash and cash equivalents

31.4

4.2

Assets held for sale

9.2


488.5

329.5

Total assets

742.0

597.3

  

Current liabilities

Financial liabilities

- Bank loans and overdrafts

10.1

10.0

- Hire purchase obligations

0.1

Trade and other payables

405.4

287.4

Current tax liabilities

13.7

9.3

Short term provisions

0.9

1.0

Derivative financial instruments

8.5


438.7

312.9


Net current assets

49.8

16.6

Non current liabilities

Financial liabilities

- Bank loans

75.9

149.2

Trade and other payables

8.7

5.7

Retirement benefit obligations

39.8

43.9

Deferred tax liabilities

9.2

8.4

Long term provisions

0.7

0.6


134.3

207.8


Total liabilities

573.0

520.7


Net assets

169.0

76.6


Shareholders' equity

Ordinary share capital

19.2

9.1

Share premium

73.6

6.2

Capital redemption reserve

14.6

14.6

Other reserve

(1.4)

(0.9)

Retained earnings

63.0

47.6

Total Equity

169.0

76.6

 

 

 

 

 

 

 

 

Consolidated Statement of Changes in Equity

Six months ended 30 June 2010

 


Capital






Share

Share

redemption

Other

Retained



capital

premium

reserve

reserve

earnings

Total


£m

£m

£m

£m

£m

£m


As at 1 January 2010


Profit for the period

Actuarial losses recognised on defined

benefit pension schemes


Deferred taxation on pension liability

Fair value on derivative instruments

As at 30 June 2010  (unaudited)















Six months ended 30 June 2009















As at 1 January 2009

Profit for the period

Actuarial losses recognised on defined

benefit pension schemes

Deferred taxation on pension liability

Fair value on derivative instruments

As at 30 June 2009  (unaudited)















Year ended 31 December 2009














As at 1 January 2009

New shares issued

Profit for the year

Actuarial losses recognised on defined

benefit pension schemes

Deferred taxation on pension liability

Share based payments

Fair value on derivative instruments


As at 31 December 2009

 

 

 

 

 

 

 

 

Consolidated Cash Flow Statement

Six months ended 30 June 2010

 


Unaudited

Unaudited

Audited


Six months ended

Six months ended

Year ended


30 June

30 June

31 Dec


2010

2009

2009


£m

£m

£m





Cash flows from operating activities








Profit for the period

15.1

5.9


Adjustments for:

Tax

6.3

2.7

Depreciation

4.0

4.1

Loss on closed business

-

-

Profit on disposal of properties

-

(0.4)

Amortisation of intangible assets

0.7

0.8

Interest income

(0.1)

(0.1)

Interest payable

6.7

8.9

Debt issue costs

0.6

0.2

Changes in working capital


(Increase)/decrease in inventories

(39.7)

95.1 


Increase in trade and other receivables

(54.6)

(29.3)


Increase/(decrease) in payables

94.5

(89.1)


Difference between pension charge and cash contributions

(1.4)

(1.0)


Movement in provisions

-

-

Cash generated from operations/(absorbed by)

32.1

(2.2)

Interest paid

(6.7)

(8.1)

Interest received

0.1

0.1

Tax (paid)/refunded

(1.3)

2.1 

Net cash inflow/(outflow) from operating activities

24.2

(8.1)


Cash flows from investing activities


Purchase of property, plant and equipment

(3.3)

(3.9)

Purchase of intangible fixed assets

-

(0.1)

Proceeds from sale of property, plant and equipment

3.6

3.9 

Proceeds from sale of business

-

- 

Net cash inflow/(used by) investing activities

0.3

(0.1)


Cash flows (used by)/from financing activities

Proceeds from issue of ordinary shares

-

-

Repayment of loans

(5.0)

-

Net proceeds from drawdown of existing bank facilities

-

10.3

Principal payments under HP agreements

(0.1)

-

Debt issue costs

-

-

Net cash (used by)/from financing activities

(5.1)

10.3


Increase in cash and cash equivalents

19.4

2.1

Cash and cash equivalents at the beginning of the period

11.9

2.1 

Cash and cash equivalents at the end of the period

31.3

4.2 

 



Notes to the Set of Financial Information

Six months ended 30 June 2010

 

1. GENERAL INFORMATION

The financial information for the period ended 30 June 2010 and similarly the period ended 30 June 2009 has neither been audited nor reviewed by the auditors.  The financial information for the year ended 31 December 2009 has been based on information in the audited financial statements for that period.

The information for the year ended 31 December 2009 and the Interim Financial Report for the period ended 30 June 2010 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.  A copy of the statutory accounts for that year has been delivered to the Registrar of Companies.  The auditors' report on those accounts was not qualified, did not draw attention to any matters of emphasis and did not contain statements under section 498 (2) or (3) of the Companies Act 2006. 

 

2. ACCOUNTING POLICIES

The annual financial statements of Lookers plc are prepared in accordance with IFRSs as adopted by the European Union.  The set of financial statements included in this half yearly financial report has been prepared in accordance with International Accounting Standards 34 'Interim Financial Reporting', as adopted by the European Union. The same accounting policies, presentation and methods of computation are followed in the half yearly financial report as applied in the Group's latest annual audited financial statements, except for the adoption in the period of IFRS 3 'Business Combinations' (revised 2008) and IAS 27 'Consolidated and Separate Financial Statements' (revised 2008). These have had no significant impact on this set of financial information.

 

Basis of preparation: Going concern

After making enquiries, the Directors have a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future and have therefore continued to adopt the going concern basis in preparing this interim consolidated financial information.

 

3. SEGMENTAL REPORTING

The following is an analysis of the Group's business reporting segments.

 

Unaudited






Six months

Motor

Parts




ended 30 June 2010

Division

Distribution

Unallocated

Group



£m

£m

£m

£m


Continuing operations





New Cars


Used Cars


Aftersales




Revenue




Segmental result before amortisation


of intangible assets and exceptional items


Amortisation of intangible assets


Interest expense


Interest income


Debt issue costs






Profit before taxation


Taxation






Profit for the financial period from continuing






operations attributable to shareholders




Segmental assets


Unallocated assets


Total assets




Segmental liabilities


Unallocated liabilities


- Corporate borrowings


Total liabilities


 

3. SEGMENTAL REPORTING (continued)

 

Unaudited






Six months

Motor

Parts




ended 30 June 2009

Division

Distribution

Unallocated

Group



£m

£m

£m

£m


Continuing operations






New Cars

Used Cars

Aftersales







Revenue


Segmental result before amortisation

Intangible assets and exceptional Items

Amortisation of intangible assets

Exceptional Items

Interest expense

Interest income

Fair value on derivative instruments

Debt issue costs


Profit before taxation

Taxation


Profit for the financial period from






continuing operations attributable






to shareholders


Segmental assets

Unallocated assets

- Property, plant and equipment

Total assets







Segmental liabilities

Unallocated liabilities

- Corporate borrowings

Total liabilities



Audited

Year ended

Motor

Parts




31 December 2009

Division

Distribution

Unallocated

Group



£m

£m

£m

£m


Continuing operations













New Cars

Used Cars

Aftersales







Revenue


Segmental result before amortisation

of intangible assets and exceptional items

Amortisation of intangible assets

Exceptional Items

Interest expense

Interest income

Debt issue costs


Profit before taxation

Taxation


Profit for the financial year from






continuing operations attributable






to shareholders

 

3. SEGMENTAL REPORTING (continued)

 

Audited






Year ended

Motor

 Parts




31 December 2009

Division

Distribution

Unallocated

Group



£m

£m

£m

£m








Segmental assets


Total assets




Segmental liabilities


Unallocated liabilities


- Corporate borrowings


Total liabilities


 

For the purposes of monitoring segment performance and allocating resources between segments, the Group's Chief Executive monitors the tangible, intangible and financial assets attributable to each segment.  All assets are allocated to reportable segments with the exception of other financial assets (except for trade and other receivables) and tax assets.  Assets used jointly by reportable segments are allocated on the basis of the revenues earned by individual reportable segments.

 

 

4. Dividends

An interim dividend of 0.6p per ordinary share is proposed (2009: NIL p per share).

 


Unaudited

Unaudited

Audited



Six months

Six months

Year



ended

ended

ended



30 June

30 June

31 Dec



2010

2009

2009



p

p

p







Ordinary dividend per share - paid in period

-

-

-


- proposed

0.6

-


 

The interim dividend will be paid on 30 November 2010 to shareholders on the register on 22 October 2010.

 

5. exceptional items

 


Unaudited

Unaudited

Audited


Six months

Six months

Year



ended

ended

ended



30 June

30 June

31 Dec



2010

2009

2009



£m

£m

£m







Refinancing costs

-

Profit on disposal of properties

-

0.4

Loss on terminated businesses

-

-

Closure costs and loss on termination of businesses

-

(2.0)

Integration/other costs

-

(0.2)

Aborted acquisition costs

-

Other

-

Reorganisation costs

-


-


Interest on closed businesses

-

Total exceptional items

-

  

 

6. interest costs - net


Unaudited

Unaudited

Audited



Six months

Six months

Year



ended

ended

ended



30 June

30 June

31 Dec



2010

2009

2009



£m

£m

£m




Net interest on pension schemes

0.5

1.2




Bank interest payable

4.5

5.1


Interest on consignment vehicles

2.1

2.2


Other interest

0.1

0.1


Interest payable

6.7


Bank interest receivable

(0.1)

(0.1)


Net interest

7.1

8.5


 

7. earnings per share

In accordance with IAS 33, earnings per share for the prior year have been restated to reflect the effect of the issue of new ordinary shares in the prior year at a price below market price.

The calculation of earnings per ordinary share is based on profits on ordinary activities after taxation amounting to £15.1m (2009: £5.9m) and a weighted average of 383,530,764 ordinary shares in issue during the period (2009: 208,921,159).  

The diluted earnings per share is based on the weighted average number of shares, after taking account of the dilutive impact of shares under option of 8,607,046 (2008: nil). The diluted earnings per share is 3.85p (2009: 3.25p).

Adjusted earnings per share is stated before amortisation of intangible assets, impairment of goodwill, the profit on disposal of properties less other exceptional items (net) and is calculated on profits of £16.4m for the period (2009: £12.5m).

 

 


Unaudited

Six months ended

30 June 2010

 

Unaudited

Six months ended

30 June 2009

 

Audited

Year ended

31 Dec 2009

 















Earnings

Earnings

per share

 

Earnings

Earnings per share

Earnings

Earnings per share



£m

 

p

£m 

p 

£m

 

p 










Earnings/(loss) attributable to

 








ordinary shareholders

15.1

3.94

5.9

2.82

 

8.0

 

2.79

 










Amortisation of intangible assets

0.7

0.18

0.8

0.38

1.7

0.59

 


Debt issue costs

0.6

0.16

0.2

-

0.9

0.31

 


Exceptional items - net

-

-

7.7

3.69

14.2

4.96

 










Tax on exceptional items

-

-

(2.1)

(1.00)

(3.8)

(1.33)

 


Adjusted

16.4

4.28

12.5

5.89

21.0

7.32

 


 

8. TAXATION

The tax charge for the period has been provided at the effective rate of 30.1% (2009: 31.0%). Following the budget in June 2010, The Finance (No.2) Act 2010 includes a reduction in the rate of Corporation Tax from 28% to 27% from 1 April 2011.

 

9. PENSIONS

The defined benefit obligation as at 30 June 2010 is calculated on a year-to-date basis, using the latest actuarial valuation as at 31 December 2008.  There have not been any significant fluctuations or one-time events since that time that would require adjustment to the actuarial assumptions made at 31 December 2008.

The defined benefit plan assets have been updated to reflect their market value as at 30 June 2010. Differences between the expected return on assets and the actual return on assets have been recognised as an actuarial gain or loss in the Statement of Comprehensive Income in accordance with the Group's accounting policy.

 

10. RISKS AND UNCERTAINTIES

There are a number of potential risks and uncertainties which could have a material impact on the Group's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results. The Board believes these risks and uncertainties to be consistent with those disclosed in pages 23 and 24 of our latest annual report, including general economic factors such as oil prices, interest rates, manufacturers' influence and stability.

 

11. INTERIM STATEMENT

The interim announcement was approved by the Board and will be posted to shareholders on 23 August 2010.  Copies are also available to the public at the registered office of the Company at 776 Chester Road, Stretford, Manchester M32 0QH.

 

Directors and Advisers

 

Executive Directors

P. Jones                              - Chief Executive
R. A. Gregson BSc FCA    - Finance Director
A. C. Bruce BA                    - Managing Director (Motor Division)

T. M. Wainwright                 - Managing Director (Parts Division)

 

 

Non-Executive Directors

P. M. White CBE FCA        - Chairman
J. E. Brown FCCA ATII
D. C. A. Bramall FCA

W. Holmes MA FCA

 

 

Registered Office

776 Chester Road
Stretford
Manchester
M32 0QH

Telephone: 0161 291 0043

Website: www.lookers.co.uk

 

 

PRINCIPAL BANKERS

Bank of Ireland

Barclays Bank PLC

HSBC Bank plc

Lloyds TSB

National Australia Bank

The Royal Bank of Scotland plc

 

 

AUDITORS

Deloitte LLP

PO Box 500

2 Hardman Street

Manchester M60 2AT

 

 

STOCKBROKERS

Numis Securities Limited

The London Stock Exchange Building

10 Paternoster Square

London EC4M 7LT

 

KBC Peel Hunt Ltd

111 Old Broad Street

London EC2M 1AP

 

 

FINANCIAL ADVISERS

NM Rothschild & Sons Limited

82 King Street

Manchester M2 4WQ

 

 

Registrars and Transfer Office

Capita Registrars
Woodsome Park
Penistone Road
Fenay Bridge
Huddersfield

HD8 0LA

Telephone: 0870 162 3131


This information is provided by RNS
The company news service from the London Stock Exchange
 
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