AM Online

Lookers reports record results

AM100 dealer group Lookers (number 8) has released its end-of-year results showing a rise in turnover of 12% and a 27% growth in operating profit. Both are record figures for the group in a market it describes as 'subdued'.

Turnover in the year to June 30th reached £648.1 compared to £576.4m in the same period last year. Operating profit was £15m compared to £11.8m. The overall group underlying operating profit margin up 15% from 2.0% to 2.3%.

However, new car sales on a like-for-like basis was down 3.5% for the first half against a market down 5.8%. Fleet sales were up 17%. Used car sales were up 25% and on a like-for-like basis up 4.7%.

Commenting on the prospects for the group, Ken Surgenor, chief executive, said: "Whilst we have been operating in a more subdued new car retail market , our strategy of having a diverse network of franchises representing both prestige and volume manufacturers with a wide geographical spread, together with our recently acquired parts distribution and used car supermarket businesses, has combined to strengthen our revenue streams enabling us to again improve the quality and quantity of earnings in the first half.

"This broad based model provides the group with a solid business platform to continue to improve profitability and support future growth."

He added that the recently acquired used car supermarkets Bristol Trade Centre and Ian Shipton Cars, were performing ahead of expectations.

"The industry forecast for 2005 is for an annual new car market at 2.45m, down 4.6% on 2004.

"Current forecasts are therefore factoring in an improvement in the second half of this year, which contrasts with the declining trend from quarter to quarter in 2004. Sales of new cars now account for 48% of turnover, and 28% of gross profit.

"The gross profit contribution from used car operations is now 19%, with aftersales now representing 53%. Whilst the new car market is undoubtedly more challenging, we believe our business is well positioned for growth given our high exposure to the aftersales market through our franchised network and our aftermarket network trading as FPS, as well as our increasing focus on used cars, which traditionally is three times the size of the new car market," Surgenor said.

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