Lookers' performance in the price

Last year Lookers’ new car sales rose 12 per cent against a 5 per cent increase in the overall market to 2.05m units - itself a four-year high. However, the key to the good performance was management's decision to axe the lower-margin parts of its fleet business. As a result, fleet volumes fell 9 per cent, but profit per fleet car sold rose 19 per cent and overall profit per new car sold was up 3.7 per cent. In used cars, "pro-active pricing", stock management, better buying meant that sales volumes rose 12 per cent and profit per car by almost 11 per cent. According to Lookers, used cars "continue to offer single biggest organic growth opportunity".

Lookers should meet broker Panmure’s revised 2013 forecasts for sales of £2.33bn and adjusted profits up from £36.8m to £38.6m; that's thanks to a good start to trading, the benefit of last year's earnings-enhancing acquisitions and a reduced interest bill. Back in January 2007, the company took out a £50m loan with a punishing cap and collar. That debt matured last month and could save up to £2.5m a year in interest costs. There’s another £30m of similar debt due to mature in 2017 and 2018.