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Record first half trading for Lookers

Lookers, the top 10 AM100 franchised dealer group, today reported a record trading performance for the first half of 2010.

Revenue increased 13.5% to £988.3m against the first half of 2009’s £870.4m, while adjusted operating profit rose 14% to £29.8m.

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.”

In its Motor division of 122 franchised dealerships, Lookers’ new car sales increased 26% to 32,469 units, ahead of the first half’s national 20% growth in new car registrations recorded by the SMMT.

Used car volumes dipped 6%, blamed largely on the winter weather, however gross margins were slightly up on 2009, and aftersales revenue increased 2% while gross margins remained at 41%.

Its Parts division, which includes distributor FPS, Apec Braking and turbo supplier BTN, grew revenue by 19% while operating profit rose 13%. This division is responsible for around a third of Lookers’ group profits.

Chairman Phil White added: “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.”
 

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