Lookers told investors this morning that it had an excellent trading performance in the first quarter to March 31 2013, which has continued to this date.
These strong results were both ahead of budget and a significant improvement on the corresponding period in the prior year.
Its motor division of franchised dealerships and used car supermarkets has enjoyed further success, underpinned by strong like for like sales volume growth, making an excellent start to the year and ending Q1 ahead of both budget and the prior year.
New car retail sales increased by 13%, which was 2% ahead of the market. Fleet volumes reduced by 7%; the reduction in volume being primarily due to low margin fleet business in 2012, which was not repeated this year.
New retail car margins increased, compared to the prior year, and fleet margins also improved, more than offsetting the margin lost from the reduction in fleet volume.
Used car volumes for the three months continued the upward trend of last year with an increase of 17% over the prior year with stable margins.
"The increase in volume is particularly pleasing given the strong comparative and is a further demonstration of our strong focus on proactive pricing, stock management, improved buying and continued investment in the group's website," said Lookers' statement.
The aftersales business in the motor division increased turnover, with a small erosion in the gross margin compared to last year. We continue to invest in technology and procedures to improve customer retention and average sales value per customer visit, as well as further advances in improving customer satisfaction.
Turnover and profitability in its independent parts division were affected by difficult market conditions, but Lookers said significant progress has been made in the first quarter of this year with product development and marketing initiatives having a positive impact. As a result, turnover and profit are ahead of last year and in line with management expectations.
Working capital continues to be well managed with strong operational cashflow, which is significantly ahead of both budget and last year. Net cashflow is also well ahead of last year and budget, with the result that net debt is at a lower level than budget. It is also a similar level to last year which is a positive move forward given that £18.3m was invested in acquisitions in the second half of last year. Our bank facilities therefore continue to have significant levels of unutilised capacity.
Lookers concluded: "Whilst economic conditions are still affecting consumer confidence, we continue to improve the operational and financial performance of the group.
"The aftersales bias to the business and our strong performance over the last four years, demonstrates the ability of the group to perform well in a challenging market.
"We are therefore confident that the group is in a good position to deliver a strong first half year performance in line with management expectations and make further progress during the rest of this year."