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Lookers reports increase in sales and profits

Lookers has announced its annual results for the year ended December 31.

Financial highlights include revenue of £2.06 billion (2011: £1.90 billion), adjusted profit before tax increased to £36.8 million (2011: £33.8m), profit before tax increased to £35.3m (2011: £31.4m) and operational cash flow improved at £66.1m (2011: £58.0m).

Operational highlights include record performance from the motor division, strong growth in used car volumes and margins, resilient performance from its independent aftermarket parts division, and revenue maintained in aftersales.

Lookers chief executive Peter Jones said: "We are pleased to have delivered another strong trading performance in 2012 and we have now had four successive years of increased profits.

"Our motor division has produced an excellent result and the parts division has delivered a resilient performance in challenging market conditions. Operational cash flow for the year was particularly positive, resulting in a strengthened balance sheet.

"These results give us further confidence that we can continue to grow the business in 2013, despite the fact that short term market conditions remain challenging.

"As economic conditions improve over the medium term, Lookers is well placed to take advantage of future growth in the new and used car markets and increased demand for aftersales and parts."

Phil White, Lookers' chairman, said: "The motor division has made excellent progress and delivered a very strong performance in the period, through increased volumes of new and used retail cars at improved margins.

"We have an excellent opportunity to improve the returns generated by the recently acquired Lomond Audi and Fleet Financial businesses, which should make a significant contribution to the motor division.

"Despite suffering from a marginal reduction in turnover in the first half of the year, the parts division recovered well in the second half and continues to produce good results, with a stable return on sales of 6% and providing a significant contribution to group earnings.

"Product development and marketing initiatives introduced during the year are also having a positive impact in the parts division with turnover in the second half of the year being higher than last year.

"The aftersales bias of the business and our improved performance over the last four years demonstrates the ability of the group to perform well in a challenging market."

White also said money was available for acquisitions.

Motor division

Lookers' motor division increased profit before tax by 16% to £31.7m, a record for the business and a significant increase over the prior year's result of £27.4m.

The group sold or closed four underperforming businesses, added seven additional franchise businesses and made three new acquisitions:

1. the entire issued share capital of Lomond Motors Limited, in July, which operates four Audi Centre dealerships in Scotland, as well as the distribution of trade parts for the VW Group

2. in June Fleet Financial (N.I.) Limited, a contract hire and leasing company based in Belfast

3. in August, the purchase of a Seat and Skoda dealership in Manchester, complementing the Stockport-based Seat and Skoda dealerships.

New cars: group sales up 12% on 2011 volumes. In fleet, volumes fell 9.4%, due to reduced sales in low margin business. Gross margin increased 3.7% on retail and 19% on fleet business.

Aftersales: Turnover up 2.8%, but focus on older vehicles means margins fell from 42% to 40%.

Used cars: volumes increased 12% year-on-year and gross profit per unit 10.5%.

For the full results released to the London Stock Exchange click here.

> Lookers' overview (Source: AMi)


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