With a return to growth in its parts division and aftersales gathering pace, car retailer Lookers (LOOK) ended the year on a high. Outperforming the market with a 19 per cent increase in new car retail volumes - compared with 16 per cent for the industry - the company's adjusted pre-tax profits rose 27 per cent to £48.1m. Used car volumes also surged by one-fifth, helped by leads from the group's website. And finance director Robin Gregson says 2014 looks equally promising.
The aftermarket is crucial for any car dealership. For Lookers, the gross profit margin on aftersales is roughly 40 per cent, compared with 8 per cent on new and used vehicle sales. As such, the 4 per cent increase in the division's turnover last year generated much higher group profits. The sales growth was driven by recovering new car volumes in previous years, as customers with young cars tend to bring them in for servicing and are more loyal to their dealership.