Trading Statement

RNS Number : 4469K

Lookers PLC

19 December 2008

 



19 December 2008

Lookers plc

Trading Statement

The Board of Lookers, one of the UK's leading motor retail groups, is announcing the following trading update as it approaches the end of the financial year ending 31 December 2008.

As has been widely reported since the Company released its Interim Management Statement, the new car market has experienced an increasingly challenging sales environment.  This has resulted in significant reductions in national sales volumes - 23% in October and 37% in November. The Northern Ireland market continues to underperform the national market.

Since the half year end, residual values of used cars have also fallen and are only expected to stabilise in early 2009.  Whilst used car volumes are behind last year, the Company is now starting to see an increase in both volumes and margin.

The aftersales business within the franchise network still continues to grow. Furthermore, the independent aftermarket parts division has also traded strongly throughout the year and its distribution costs will start to benefit from the recent fuel price reductions.

As a result of the current trading conditions the Board now expects pre exceptional profits for 2008 to be not less than £10.0 million.  

Given the current market conditions and the outlook for 2009, the Board will not be recommending the payment of a final dividend for the year ending 31 December 2008.  The Company continues to be cash generative reflecting its operating performance and the tight control of working capital.

The Company is complying with its financing arrangements and is currently engaged with its finance providers to ensure that these remain appropriate for the anticipated market conditions in 2009.  

The restructuring programme is ahead of plan with additional savings now identified. By the end of December we will have exited 21 business units at an exceptional cost of circa £12m. As a result of this and other cost cutting measures the Board now expects annualised savings of circa £7.5m.  Furthermore, a constant focus on driving the aftersales performance within the franchised business and a continued strong financial performance in the independent aftermarket parts distribution business, ensures that the Company is in a good position to address the current difficult trading conditions in the new and used car markets.

For further information:

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

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