Shares in motor dealer Lookers (LOOK) fell 2 per cent on the day, despite this solid set of interim results. Adjusted pre-tax profits of £50.1m set a new record for the company, and came in marginally ahead of broker Numis's expectations, but the share price is down by a fifth year-on-year. Much of that probably has to do with concerns over the cyclical nature of the motor retail industry, particularly in the context of a possible consumer slowdown in the UK.
But while company bosses admit the recent referendum vote "came as a surprise", the business hasn't seen any difference in customer behaviour. In fact, measuring the order intake between 24 June to 17 August, growth remains flat year-on-year. Chief executive Andy Bruce admits new car volumes could be tempered by a possible recession (in that the division tends to be inherently linked to economic output and population growth) adds that it usually doesn't take long to pick up again. During the first half, gross profit from new cars grew 22 per cent, or 4 per cent on a like-for-like basis, while the used cars division grew the latter measure by 12 per cent.
Analysts at Numis expect pre-tax profits of £80.5m for the year ending December 2016, giving EPS of 15.8p, compared to £70.6m and 14.1p in 2015.
| LOOKERS (LOOK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 129p | MARKET VALUE: | £510m | |
| TOUCH: | 128-130p | 12-MONTH HIGH: | 189p | LOW: 88p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 78p* | NET DEBT: | 24% | |
| Half-year to 30 June | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 1.75 | 39.9 | 8.1 | 1.07 |
| 2016 | 2.34 | 46.7 | 9.4 | 1.28 |
| % change | +34 | +17 | +17 | +20 |
Ex-div: 27 Oct Payment: 25 Nov *Includes intangible assets of £160m, or 40p a share | ||||
