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Lookers interim results exceed expectations

The trading performance of Lookers for the four months ended 30 April 2010 is ahead of budget.

The company's interim management statement published today shows the group is continuing to produce record results.

As a result, the group says results for the half year to 30 June 2010 are now predicted to exceed management expectations.

Lookers' independent parts division, FPS, continues to make a significant contribution to the group's earnings and has delivered further improvements in profitability and is trading ahead of management expectations and last year.

In its motor division, new car sales increased by 23% compared to the same period last year and are in line with the UK market.

However, Lookers has increased retail and corporate market share.

"We continue to make further progress in refining our franchise portfolio and are currently adding an incremental five franchises into our current site infrastructure, further strengthening our business base," said the IMS.

"Despite the poor weather in January, used car volumes have recovered to 2009 levels and unit margins remain consistent with last year, delivering continuing robust results."

Aftersales in the motor division also continued to deliver strong results with operating profits ahead of management
expectations and last year.

"The strong operating performance across all activities within the motor division, combined with a continued focus on costs has secured an excellent start to the year and represents further progress in a period of economic uncertainty," it said.

"We continue to focus on working capital management and operating cashflow has exceeded management expectations with the consequence that net debt is well controlled and we have significant levels of unutilised bank facilities.

"Both operating divisions have made an excellent start to the year which gives us confidence that the result for the half year should exceed management expectations.

"The underlying new car market is likely to be challenging as a result of general economic conditions, however, the aftersales bias to the business, combined with the strong performance in 2009 and the record start to the year, demonstrates the strength of the group’s business and leaves us well positioned to continue to trade successfully and deliver further growth.

"We continue to focus on areas where we can further strengthen the performance of the Group’s franchises.

"The parts business has benefited from the addition of new
product lines and continues to review further opportunities to expand the business.

"Our strengthened balance sheet enables us to pursue selective acquisition opportunities and we are therefore confident that the group is in a strong position to make further progress in 2010 and beyond."

Peter Jones, Lookers chief executive, said: "While market conditions remain challenging we are very pleased with the excellent start to the year.

"Both the parts and motor divisions have produced record trading results in the period and this gives us confidence that we will continue to trade successfully this year and be in a position to pursue strategic growth opportunities as they arise." 

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