28 October 2011
Lookers plc
Interim Management Statement
Lookers plc, ("Lookers", "the company" or "the group"), one of the leading UK motor retail and aftersales service groups, is issuing an interim management statement for the period from 1 July 2011 to 27 October 2011.
We are pleased to report that trading during the quarter ended 30 September 2011 and particularly during the critical month of September, has been satisfactory, despite the background of difficult trading conditions in the motor retail market and uncertain general economic conditions across the UK.
The UK new car market reduced by 5% in the nine months to 30 September, with the retail new car market reducing by 15% and the fleet market increasing by 4%. We continued to gain market share with total new car sales 2% higher than the previous year, 7% ahead of the market. New car retail sales reduced by 10%, which is 5% ahead of the market and fleet volumes increased by 30%, significantly ahead of the market. New car margins remain at satisfactory levels and were ahead of budget for the quarter.
Used car volumes for the quarter were slightly higher than last year and are 4% higher than last year for the nine months. However, used car margins have been affected by weaker consumer demand and as we reported at the half year, are slightly lower than last year.
Aftersales revenue has remained in line with that for the prior year, despite a reduction in the UK car parc for cars under three years old, with aftersales margins held at the same level as last year. This demonstrates the success of our continued investment in technology and procedures to improve customer retention and average sales value per customer visit.
Our market leading independent parts division continues to perform well and has, despite reduced turnover with two large customers, maintained its performance being both in line with budget and ahead of the prior year.
Working capital continues to be well managed and cashflow is ahead of both budget and the prior year. The sale of surplus assets has realised £12.7 million in the nine months to 30 September and we have repaid £21.8 million of bank loans in this period. Net debt is therefore at a lower level than both budget and the position at 30 September 2010.
We are in advanced discussions with the group's syndicate of banks, to replace our current bank facilities, which expire in April 2012 and expect that this will be concluded this quarter. We anticipate that the new facilities will provide the group with greater flexibility and also result in a reduction in the interest rate margin that is paid on group borrowings.
Outlook
The motor division has made reasonable progress in the period, which is a good performance in a difficult market. The parts division continues to produce good results and makes a significant contribution to group earnings which are not affected by fluctuations in the new and used car markets.
The group balance sheet has been further strengthened by strong operational cashflow and we have substantial headroom in our bank facilities. This provides financial security for the group as well as providing funding for us to make strategic acquisitions in both the motor and parts divisions.
The new and used car markets continue to be affected by uncertain economic conditions and the impact this has on consumer confidence. However, the aftersales bias to the business and the strong performance over the last two years, demonstrates the ability of the group to perform well in a difficult market. We therefore continue to anticipate that the results for the financial year to 31 December 2011 will be in line with management expectations.
For further information:
Lookers plc | Telephone: 0161 291 0043 |
Peter Jones, Chief Executive |
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Robin Gregson, Finance Director |
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Hudson Sandler | Telephone 020 7796 4133 |
Nick Lyon / Kate Hough |
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