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Profits and revenues up for Lookers at half year point

Car retailer and parts wholesaler Lookers this morning reported half-year rises in sales and profits.

It coincided with an announcement that chief executive Peter Jones is to retire from his role at the end of the year, to be replaced by current chief operating officer Andy Bruce, while Nigel McMinn is joining from Benfield Motor Group to become managing director of Lookers' motor division of 126 franchised dealerships.

Interim revenues rose 20.3% to £1.24bn while adjusted pre-tax profit rose 19.5% to £28.8m before amortisation of intangible assets and debt issue costs.

Earnings per share increased 21.3% to 5.52p from 4.55p, and net debt reduced to £39.1m from £48.2m, leading to a fall in gearing to 18% from 22%.

In its review of its motor division, Lookers said core retail new car sales increased by 19%, better than the UK's 17% retail market rise, although its fleet volume fell by 8% as it avoided very low margin business.

Gross profit per unit  increased by 6.9% on new retail cars and 12.9% on new fleet cars.

Used car volumes increased 22% and gross profit per unit rose by 6.4%, supported by a robust stocking policy to increase stock turn and a 37% increase in leads generated from the group website.

Aftersales revenue was marginally lower year-on-year due to low margin parts sales in H1 2012. After adjusting for this factor, Lookers said, aftersales revenues were up 1.2% and accompanies by a margin increase from 40.2% to 41.6%. Service plan sales have increased "significantly", the car dealer added.

In its review of its parts division, which operates three independent aftermarket parts suppliers, Lookers said turnover had risen 3% accompanies by a small decrease in margin, however cost controls had ensured the division's pre-tax profit rose 5% to £6.56m.

Peter Jones, chief executive, said: "We are very pleased that Lookers has achieved another record trading performance and that the group has delivered four and a half years of successive years of profit improvement."

"The continuing recovery in the UK new car market and the recovery of our parts division gives us confidence that we can continue to grow the business, deliver improved results for the full year and increase dividend payments to our shareholders."

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