Bosses at car retailer Lookers (LOOK) struck a cautious tone over the prospects for the new car market this year. As part of its half-year results, where the group reported a solid 7 per cent improvement in like-for-like new car sales, chief financial officer Robin Gregson admitted that the Society of Motor Manufacturers & Traders' forecast for a 2.6 per cent contraction in the new car market in 2017 looked like “a reasonable estimate”. This is in contrast to industry predictions at the start of the year, which expected new car sales to be relatively flat compared with 2016.
The change of heart follows a worse than expected second quarter for the company, where sales were adversely affected by a pull forward in demand ahead of new vehicle excise duties in April, and a generally uncertain political climate around the snap general election. But Mr Gregson is optimistic about the rest of Lookers’ business. Used cars and aftersales still account for two-thirds of group profits, and it’s his belief that residual values in the former division “are holding up” so far.
Analysts at Peel Hunt expect pre-tax profits of £77m for the year ending December 2017, giving EPS of 15.2p, compared with £63.1m and 13.6p in 2016.
| LOOKERS (LOOK) | ||||
| ORD PRICE: | 109p | MARKET VALUE: | £432m | |
| TOUCH: | 109-110p | 12-MONTH HIGH: | 140p | LOW: 96p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 5 | |
| NET ASSET VALUE: | 93p* | NET DEBT: | 17% | |
| Half-year to 30 June | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016** | 2.34 | 46.7 | 9.4 | 1.28 |
| 2017** | 2.46 | 44.6 | 9.1 | 1.41 |
| % change | +5 | -4 | -4 | +10 |
| Ex-div: | 26 Oct | |||
| Payment: | 24 Nov | |||
| *Includes intangible assets of £221m, or 56p a share ****Figures include continuing and discontinued operations | ||||
