19th Apr 2006 15:20
Lookers PLC19 April 2006 19 April 2006 LOOKERS plc ("Lookers" or the Company") UNAUDITED FIRST QUARTER TRADING UPDATE Lookers is pleased to announce the following first quarter trading update forthe three months to 31 March 2006. Financial Highlights (unaudited) • Turnover over the period increased by 17 per cent. to £385.0 million (Q1 2005: £330.4 million) • Adjusted* operating profit up 71 per cent. to £13.2 million; 51 per cent on existing businesses • Operating margins* for the period at 3.4 per cent (Q1 2005: 2.3 per cent) • Adjusted* profit before tax up 90% to £11.0 million (Q1 2005: £5.8 million) *before amortisation of intangible assets, impairment of goodwill andexceptional items Commenting, Ken Surgenor, Chief Executive of Lookers plc said: "It is ironicthat our strategy is being questioned when we continue to outperform the marketand have performed exceptionally well in the most important trading period ofthe year. Our recent acquisitions are performing ahead of expectation and welook forward to benefiting from a full year contribution from these businesses. Lookers has the broadest revenue streams in the industry and is arguably betterequipped than any of its peers to thrive in the current retail environment. Thisperformance unambiguously demonstrates the effectiveness of our strategy indelivering strong growth across all our diversified business streams andsubsequent value to shareholders." Overview Trading in the first quarter, which includes the key registration month ofMarch, was excellent and significantly ahead of the Board's expectations. Newcar retail sales were up 19 per cent. on the same period last year, with likefor like sales up 12 per cent. Used car retail sales increased by 34 per cent.,with like for like used car retail sales up 8 per cent against strong prior yearcomparatives. Performance The outstanding performance achieved in the first quarter is particularlyimpressive given that new car registrations were down 4.6 per cent. for theperiod and clearly demonstrates that our strategy, strong manufacturerrelationships and well-balanced business continues to enable Lookers to deliverstrong growth ahead of the market. Lookers' decentralised management structure, which fosters a healthyentrepreneurial approach at dealership level has once again been instrumental inallowing us to outperform the market and drive excellent growth across all ourbusiness streams. During the course of last year we saw major disruption from refurbishments, newbuilds and relocations of 20 sites (representing 22 per cent. of our franchisedoutlets). This work was completed by the year-end and we have begun to see thebenefits of these actions flow through. Our six refurbished Toyota businessesare attracting considerably higher customer footfall and customers haveresponded very positively to the new retail concept Vauxhall outlet that wecompleted at the end of last year on Boucher Road, Belfast. In addition, ourrelocation of Chrysler Jeep from two rented sites in Lisburn and Belfast to themain freehold site in Boucher Road is also proving a success. Finally, we havecontinued to make better use of existing facilities by refranchising MG Roveroutlets and introducing complementary brands into certain PAG sites. On the volume side, Vauxhall continues to perform strongly across our 17 UKoutlets. In terms of prestige brands, PAG has once again achieved first classresults, exemplified by the better than anticipated performance of the recentlyacquired HR Owen businesses. Encouragingly we have also seen a much improvedperformance from our five Volkswagen outlets. Turning to our used car businesses, we now have used car supermarkets in theSouth East, South West and Midlands. In the period we have sold in excess of2800 units and are firmly on track to retail over 12,000 cars a year. We havebeen particularly pleased with the performance of our Essex used car supermarketwhich commenced trading this year. Our parts distribution business FPS Distribution has continued to build on itsstrong growth achieved last year and the integration of APEC Limited is going toplan and has achieved better than expected results. -ends- Enquiries: Ken SurgenorDavid DysonLookers plc 0161 291 0043 Andrew HayesNick LyonJames Hill Hudson Sandler 020 7796 4133 The First Quarter trading update includes the following unaudited financialinformation for the Group for the three months ended 31 March 2006 Unaudited Financial Information Three months Three months ended ended 31 March 2006 31 March 2005 £M £M Turnover 385.0 330.4 Operating profit before amortisation, impairment and exceptional items 13.2 7.7(adjusted operating profit) Profit before tax, amortisation, impairment and exceptional items (adjusted 11.0 5.8profit before tax) Basis of Preparation The unaudited financial information included in the First Quarter trading updatehas been prepared on a basis consistent with the accounting policies that areexpected to be used in Lookers' 2006 Annual Report The unaudited financial information is based on the unaudited managementaccounts for the three months ended 31 March 2006. Adjusted operating profit and adjusted profit before tax are calculated beforededucting the amortisation of intangible assets, impairment of goodwill andexceptional items (which include bid defence costs). NM Rothschild & Sons Limited ("Rothschild") which is authorised and regulated inthe United Kingdom by the Financial Services Authority, is acting for Lookersand no-one else in connection with the matters referred to herein and will notbe responsible to anyone other than Lookers for providing the protectionsafforded to clients of Rothschild or for giving advice in relation to suchmatters. Each of Rothschild and PricewaterhouseCoopers LLP has given and not withdrawnits written consent to the publication of its letter dated 19 April 2006 as setout in the Annex to this Announcement. This announcement contains statements that are or may be forward-looking withrespect to the financial condition, results of operations and businesses ofLookers. These forward-looking statements include risk and uncertainty becausethey relate to events and depend on circumstances that will occur in the future.There are a number of factors which could cause or may cause actual results ordevelopments to differ materially from those expressed or implied by suchforward-looking statements. Letter from NM Rothschild & Sons Limited in relation to the Unaudited Financial Information N M Rothschild & Sons Limited 82 King Street Manchester M2 4WQ Strictly Private & ConfidentialLookers plc776 Chester RoadStretfordManchesterM32 0QH 19 April 2006 Dear Sirs We have discussed the unaudited financial information regarding the adjustedprofit before tax of Lookers plc and its subsidiary undertakings for the threemonths ended 31 March 2006 (the "Unaudited Financial Information") and the baseson which it has been prepared with you as Directors of Lookers plc. We have alsodiscussed the accounting policies and basis of calculation for the UnauditedFinancial Information with PricewaterhouseCoopers LLP, Lookers plc's auditors,and we have considered their letter of today's date addressed to both yourselvesand ourselves on this matter. On the basis of the foregoing, we consider that the Unaudited FinancialInformation for which you as Directors of Lookers plc are solely responsible,has been compiled with due care and consideration. This letter is provided to you solely in connection with Rule 28.3(b) of theCity Code on Takeovers and Mergers and for no other purpose. Yours truly, N M Rothschild & Sons Limited PricewaterhouseCoopers LLP 101 Barbirolli Square Lower Mosley Street Manchester M2 3PW The DirectorsLookers plc776 Chester RoadStretfordManchesterM32 OQH N M Rothschild & Sons Limited82 King StreetManchesterM2 4WQ 19 April 2006 Dear Sirs Lookers plc We report on the unaudited financial information included within the firstquarter trading update of Lookers plc (the "Company") and its subsidiaries forthe three month period ended 31 March 2006 and 2005, comprising the Turnover,Operating profit before amortisation of intangible assets, impairment ofgoodwill and exceptional items, Profit before tax, amortisation of intangibleassets, impairment of goodwill and exceptional items, and Profit beforeamortisation of intangible assets, impairment of goodwill and exceptional items(together the "Unaudited Financial Information"). The Unaudited FinancialInformation and the basis on which it is prepared are included in the firstquarter trading update (the "Document") issued by the Company on 19 April 2006. This report is required by Rule 28.3(b) of the City Code and is given for thepurpose of complying with that rule and for no other purpose. The work we have carried out on the Unaudited Financial Information is solelyfor the purpose of reporting to the Directors and to the Financial Adviser.Accordingly, we assume no responsibility in respect of this report to Pendragonplc (the "Offeror") or any other person connected to, or acting in concert withthe Offeror or to any other person who is seeking or may in future seek toacquire control of the Company (an "Alternative Offeror") or to any other personconnected to, or acting in concert with, an Alternative Offeror. Responsibilities It is the responsibility of the directors of the Company (the "Directors") toprepare the Unaudited Financial Information in accordance with the requirementsof the City Code. In preparing the Unaudited Financial Information the Directorsare responsible for correcting errors that they have identified which may havearisen in unaudited financial results and unaudited management accounts used asthe basis of preparation for the Unaudited Financial Information. It is our responsibility to form an opinion as required by Rule 28.3(b) of theCity Code as to the proper compilation of the Unaudited Financial Informationand to report that opinion to you. Basis of Preparation of the Unaudited Financial Information The Unaudited Financial Information is required to be presented on a basisconsistent with the accounting policies the Company anticipates applying in itsconsolidated financial statements for the year ending 31 December 2006. TheUnaudited Financial Information has been prepared on the basis stated in theDocument, and is based on the unaudited management accounts for the 3 monthsended 31 March 2006 and 2005. Basis of Opinion We conducted our work in accordance with the Standards for Investment Reportingissued by the Auditing Practices Board in the United Kingdom. Our work includedevaluating the basis on which the historical financial information included inthe Unaudited Financial Information has been prepared and considering whetherthe Unaudited Financial Information has been accurately computed using thatinformation and whether the basis of accounting used is consistent with theaccounting policies of the Company. We planned and performed our work so as to obtain the information andexplanations we considered necessary in order to provide us with reasonableassurance that the Unaudited Financial Information has been properly compiled onthe basis stated. However, the Unaudited Financial Information has not been audited. The actualresults, therefore, may be affected by revisions to accounting estimates due tochanges in circumstances, the impact of unforeseen events and the correction oferrors in the unaudited management accounts. Opinion In our opinion, the Unaudited Financial Information has been properly compiledon the basis stated and the basis of accounting used is consistent with theaccounting policies of the Company. Yours faithfully PricewaterhouseCoopers LLPChartered Accountants This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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