Lookers' motor division increased profit before tax by 14.1%, to £21.1 million, a record for the business, compared to £18.5 million last year.

New cars

Gross profit per unit on new retail cars increased by 3.6% compared to the prior year, while gross profit per unit on fleet business increased by 40% compared to the previous year. This offset the 7.5% reduction in fleet volume.

Lookers is expecting the new car market to remain flat this year.

Used cars

The group said its increase in used volumes by 11.% and gross profit per unit up 9.5% was due to "pro-active pricing, stock management, improved buying and further focus on the effectiveness of the group’s website".

Lookers has focussed sourcing a broader used car stock mix and is expecting to increase volumes and margins further in the second half of 2012.

Aftersales

Aftersales turnover has maintained on a like-for-like basis but has seen gross margins eroded in comparison to the first six months of 2011.

Lookers has made a number of improvements to its customer relationship marketing processes to help increase conversion rates.

The group now also has an electronic vehicle health check system deployed across the entire business. Dealers within the group continue to focus on selling service plans to increase retention.

Parts division

Parts turnover reduced just below the level achieved last year. The parts division operates through three companies, FPS, Apec Braking and BTN Turbo, each supplying hard parts to the independent aftermarket.

The customer base is primarily motor factors which, in turn, supply the independent repair sector.

Turnover for the division was 1.5% down on prior year, although the reduction was in the first quarter, whereas turnover in the second quarter was similar to last year.

The loss of turnover cost £0.4m of gross margin and gross margins suffered a decline as active pricing was used to defend volumes, costing a further £0.6m of margin, with the result that gross profit reduced by £1m in the period.

The parts division saw a reduction in operating profit to £0.9m. Profit before tax for the division was £6.2mcompared to £7.1m last year.

FPS, Lookers' national warehouse distributor of branded automotive hard parts, is the largest company in the parts division and represents almost three-quarters of divisional turnover.

FPS turnover reduced by 1.3% with profit before tax reducing to £4.8m from £5.2m last year.