Bumper new and used car sales have driven impressive growth at car dealer Lookers (LOOK). Half-year like-for-like new car sales increased 19 per cent year on year, outperforming the market by two percentage points, and gross profit per new vehicle sold was up by 6.9 per cent.
Particularly impressive, though, was the 22 per cent volume growth in used cars, outperforming a 5 per cent market decline. Finance director Robin Gregson says this reflects disciplined stocking and website sales - which soared 37 per cent. Fleet volumes fell 8 per cent, however, but higher-margin business more than offset that, leaving profit per vehicle up 13 per cent. After-sales were largely flat, but Mr Gregson reckons business will tick up, reflecting rising new car sales. Lookers boasts a healthy-looking order book for the important September month, too, and the new car market is forecast to grow into the second half.
Overall, the motor division's half-year pre-tax profit rose 18.5 per cent to £26.3m, while the parts division increased profit by 5 per cent to £6.5m. Meanwhile, strong cash generation helped cut net debt by 19 per cent in the half. Chief executive Peter Jones is retiring on 31 December and will be replaced by chief operating officer Andy Bruce.
Broker Numis Securities has upped its forecasts and expects full-year pre-tax profit of £41.5m, giving EPS of 8p (from £36.8m and 7.2p in 2012).
| LOOKERS (LOOK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 129p | MARKET VALUE: | £499m | |
| TOUCH: | 127-130p | 12-MONTH HIGH: | 133p | LOW: 66p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 57p* | NET DEBT: | 18% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 1.03 | 23.3 | 4.55 | 0.80 |
| 2013 | 1.24 | 28.0 | 5.52 | 0.88 |
| % change | +20 | +20 | +21 | +10 |
Ex-div: 30 Oct Payment: 29 Nov Includes intangible assets of £76.8m, or 20p a share | ||||
