This is the seventh year in a row motor retailer Lookers (LOOK) has reported record profits. Much of this has been achieved thanks to the company’s aggressive buy-and-build strategy, which arguably hit its peak last year. The purchase of the Benfield Motor Group for £87.5m last September was, according to finance director Robin Gregson "the biggest deal in the sector" both by cash price, and the fact Benfield brought with it 30 dealerships, including Audi, Honda, Toyota and Volkswagen.
Of course, Lookers is also benefiting from a positive point in the car market cycle. Demand for new and used cars remains high. Sales of the former grew 11 per cent on a like-for-like basis while the latter grew by 7 per cent. Over the past four years, sales of used cars at Lookers have grown by a whopping 55 per cent, and bosses there expect momentum to continue in that division this year. The new car market also reached record growth levels in 2015, and Lookers says it expects more "modest growth" in 2016.
Analysts at Peel Hunt expect pre-tax profits of £81.6m this year, giving EPS of 16.5p, compared with £70.6m and 14.5p in 2015.
| LOOKERS (LOOK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 160p | MARKET VALUE: | £634m | |
| TOUCH: | 160-160.4p | 12-MONTH HIGH: | 189p | LOW: 143p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 75p* | NET DEBT: | 54% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 |
| 2015 | 3.65 | 62.8 | 12.9 | 3.12 |
| % change | +20 | +6 | +7 | +10 |
Ex-div: 5 May Payment: 3 Jun *Includes intangible assets of £158m, or 40p a share | ||||
