It was another year of sales and profit acceleration at Lookers (LOOK). The car retailer beat forecasts to post a 31 per cent increase in adjusted operating profit to £76.6m. That's even more impressive considering guidance was upgraded five times last year.
The motoring division delivered good volume growth for both new and used cars, up 10 per cent and 4 per cent, respectively. Margins improved, too, thanks in part to cost control, but also to higher volumes of luxury cars in the product mix. Finance director Robin Gregson said the internet really boosted used-car sales, as leads generated through the company's website grew by more than a third. Consequently, Lookers is set to invest much more in its multichannel offering.
At the aftersales division, which services and repairs cars, the growing number of vehicles under three years old on the road boosted turnover by 5 per cent, as these tend to be better cared for. The parts business, which accounted for one-fifth of group profit, is also important as it is higher margin and less cyclical. Sales there were up 4 per cent.
Lookers spent £27.4m acquiring Audi, Skoda and Volkswagen dealerships, which will boost the numbers this year. Peel Hunt expects pre-tax profit of £67m, giving EPS of 13p, up from £63.9m and 13p in 2014.
| LOOKERS (LOOK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 148p | MARKET VALUE: | £581m | |
| TOUCH: | 148-149p | 12-MONTH HIGH: | 157p | LOW:117 |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 65p* | NET DEBT: | 20% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 1.88 | 31.1 | 6.0 | 1.8 |
| 2011 | 1.90 | 31.4 | 6.5 | 2.18 |
| 2012 | 2.06 | 34.3 | 6.8 | 2.35 |
| 2013 | 2.46 | 43.9 | 9.3 | 2.58 |
| 2014 | 3.04 | 59.2 | 12.0 | 2.84 |
| % change | +23 | +35 | +30 | +10 |
Ex-div: 7 May Payment: 5 Jun *Includes intangible assets of £114.2m, or 29p a share | ||||
