Despite recent headlines, motor retailer Lookers' (LOOK) results suggest there's little wrong with the domestic new car market. Chief financial officer Robin Gregson credits the relative stability of personal contract purchases (PCPs) - which help consumers spread the cost of a new car - for helping the environment remain "entirely different" to that of 2008.
Industry bodies have warned about a contraction in the new car market, but Lookers says demand remains robust, even in light of a potential consumer slowdown this year. The group has also focused on its fleet sales, including commercial vehicles, which helped new car gross profits grow 11 per cent. High-margin aftersales also remain important, with gross profits there up 9 per cent on a like-for-like basis, while used cars also grew gross profits by 7 per cent on the same measure.
The group also offloaded its parts division last year - something Mr Gregson hadn't set out to do - for £126m, after one of its largest customers offered "the right price". The cash will be redirected to expand the group's other dealership networks.
Analysts at Peel Hunt expect pre-tax profits of £77m for 2017, giving EPS of 15.2p (up from £63.1m and 13.6p last year).
| LOOKERS (LOOK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 127p | MARKET VALUE: | £503m | |
| TOUCH: | 126.5-127p | 12-MONTH HIGH: | 170p | LOW: 88p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 6 | |
| NET ASSET VALUE: | 86p* | NET DEBT: | 22% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 |
| 2016 | 4.28 | 91.8 | 20.5 | 3.64 |
| % change | +17 | +46 | +59 | +17 |
Ex-div: 4 May Payment: 31 May *Includes intangible assets of £217m, or 55p a share | ||||
