14th May 2014 09:43
LONDON (Alliance News) - Car retailer Lookers PLC Wednesday said it expects its 2014 results to beat current market expectations, after it outperformed the UK retail new car market in the first quarter of the year with a 25% rise in like-for-like new retail car sales, and said profit margin improved.
The company said it had continued to gain market share in the three months to end-March, and its performance was better than it had expected as it outperformed the 18% growth in the UK retail new car market in the quarter.
It said its 6% growth in fleet volumes had underperformed the 9% growth in the broader UK fleet market, but its fleet margins increased as it focused on the profitability of this business line.
"We have made strong progress in increasing used car volumes over the last two years and it is very pleasing to report further growth in used cars where volumes increased by 8% compared to last year, which was a strong comparative," it said in a statement.
It said margin was also up in its used car business.
Revenue in its aftersales business, which includes servicing, rose 9% in the first quarter on a like-for-like basis. Margin was also up in this operation thanks to rising numbers of cars under three years old and as the company took steps to improve technology, retain customers and average spend per visit rose.
"It is also a reflection of our continued focus on increasing customer retention through the sale of service plans, where customers commit to longer term contracts for vehicle servicing," the company said.
Lookers said the Colborne Garages business it bought for GBP33.6 million in early March had traded ahead of its expectations in March. The business includes three Audi, two Volkswagen and a Skoda dealership in Surrey and a Jaguar Land Rover and Bentley dealership in North London.
Revenue in Lookers' independent parts division rose 6% on the year in the first quarter as it invested in new and existing product lines. It said it maintained margin through careful cost control, meaning pretax profit rose in line with the revenue growth.
Analysts are currently expecting Lookers to post a 2014 pretax profit off GBP54.7 million, according to consensus forecasts on Morningstar. It reported pretax profit of GBP43.9 million in 2013, up from GBP34.3 million in 2012.
Lookers shares were up 1.8% at 141.75 pence Wednesday morning.
By Steve McGrath; [email protected]; @SteveMcGrath1
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