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Lookers on target for first half record results

Lookers, the number five dealer group in the AM100, has reported that trading to the end of June is ahead of budget.

It said in a trading statement covering May 11 to June 30, 2010 - the end of the company’s interim financial period - that it expects results for the half year to exceed expectations.

All its divisions are performing ahead of plan, with the independent parts division delivering record results.

The motor division has continued to deliver results ahead of budget, with new vehicle sales growth particularly encouraging.

The group is looking to fleet sales, which grew 25% last month overall according to SMMT figure, to sustain its growth.

"There has been a continued recovery in the corporate new car market, which represents a continuing opportunity to improve our market share and there are further cost savings to deliver," said the interim statement.

"We believe these factors will help to underpin a successful result for the year for the motor division."

Used car sales and aftersales, which were affected for a short period in January by the adverse weather, continue to be at "encouraging" levels, today's statement said.

The new and used car retail markets are likely to continue to be affected whilst consumer confidence remains fragile, although the aftersales are helping to reduce this effect, it said.

The group's independent parts distribution business is also key.  It provides a "counter cyclical hedge" against economic
challenges to the motor division, as it operates in the growing four-year-plus sector.

Peter Jones, Lookers chief executive said: “We believe the group will deliver record results for the first half of the year, giving us confidence that we can continue to grow the business and deliver successful results for the full year, despite the economic challenges facing the UK retail sector.

"The factors that created exceptional charges in 2009 are now behind us, ensuring that trading profits and cash flow are not eroded and further strengthening our balance sheet, thereby providing the flexibility to take advantage of growth opportunities where they occur.”

The financial results for the six months will be announced on 18 August 2010.

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