28th Oct 2014 08:10
LONDON (Alliance News) - Motor retailer Lookers PLC Tuesday said its third-quarter results were up on the year and ahead of its target, after an "excellent" trading performance, particularly in September, the second-biggest month in a car retailer's annual calendar, and it expects its full-year results to be slightly ahead of market expectations.
In a statement, the company said new car sales were up 12.6% in the three months to end-September, beating the 9.1% increase in the overall UK new car market. Core retail new car sales were 11.7% higher than the previous year on a like-for-like basis, compared with a UK market increase of 10%, it said. It also said margins increased compared with last year.
Its fleet volumes rose 19.5%, more than double the 8.2% growth in the UK fleet market, and used car volumes rose 5.4% on the year accompanied by higher margins.
"This highlights our successful focus on used car sourcing, pricing, stock management and ongoing increases in sales leads and enquiries, generated by the group website Lookers.co.uk in which we continue to invest to deliver greater functionality and further increases in enquiries," it said.
Revenue was up 6.3% in Lookers' aftersales business, with margins up in this unit too. It echoed peers in saying that the surge in new car sales over the past three years is now feeding through to the aftersales market as those cars are now being brought in for servicing and work.
"This trend should continue due to the increase in the new car market over the last two years," it said.
Revenue rose 5% in its independent parts business, and profit in this unit was also up on the year.
Lookers added that cash flow continued to be strong during the quarter and was significantly higher than its target. Its ratio of net debt to earnings before interest, tax, depreciation and amortisation remains well below 1.0.
"The board believes this momentum is sustainable and that the group is positioned to deliver further growth in the final quarter of 2014 and produce results for the year slightly ahead of current market expectations, which will represent a significant increase over the result for the previous financial year," the company said in an outlook statement.
Lookers is currently forecast to report a pretax profit of GBP60.43 million in 2014, according to data on Morningstar. The company reported a pretax profit of GBP43.9 million for 2013, up from GBP34.3 million in 2012, as revenue rose to GBP2.46 billion, from GBP2.06 billion.
Lookers shares were up 3.3% at 133.00 pence early Tuesday.
By Steve McGrath; [email protected]; @stevemcgrath1
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