TIDMLOOK
RNS Number : 9400I
Lookers PLC
14 August 2019
14 August 2019
LOOKERS plc
Interim Results for the six months ended 30 June 2019
Lookers plc, ("Lookers" or "the Group"), one of the leading UK
motor retail and aftersales service groups, announces its unaudited
results for the six months ended 30 June 2019 ("H1", "first half"
or "the Period").
Key financials:
HY2019 HY2018*** Var % FY2018***
Revenue GBPm 2,646.4 2,576.5 +2.7% 4,879.5
------------------ ----------------------- --------------- ----------------------
Underlying profit before tax
GBPm* 29.2 40.3 -27.5% 53.9
------------------ ----------------------- --------------- ----------------------
Profit before tax ("PBT")
GBPm 24.9 41.3 -39.7% 48.6
------------------ ----------------------- --------------- ----------------------
Net debt GBPm** 73.9 54.5 -35.6% 86.9
------------------ ----------------------- --------------- ----------------------
Underlying basic earnings
per share (p)* 6.06p 8.59p -29.5% 11.22p
------------------ ----------------------- --------------- ----------------------
Basic earnings per share (p) 5.17p 8.80p -41.3% 10.12p
------------------ ----------------------- --------------- ----------------------
Dividend per share (p) 1.48p 1.48p - 4.08p
------------------ ----------------------- --------------- ----------------------
* PBT before property disposals, share based compensation, defined
benefit pension enhanced past service costs, provision for the restructure
of regulated activities, net interest on pension scheme obligations
and debt issue costs
** Excluding lease liabilities under IFRS16
*** Restated for first time adoption of IFRS 16 (see note 1) and reclassification
of amortisation of on intangible assets to underlying earnings
Highlights:
-- Increase in total revenue of 2.7% with growth in both used
cars and aftersales. Like-for-like revenue growth of 0.1%
-- Underlying PBT of GBP29.2m, down -27.5% reflecting a challenging UK market backdrop
-- Continued outperformance of the UK new car market. New car
unit like-for-like sales down -1.2% versus UK market decline of
-3.4%
-- Resilient aftersales performance with like-for-like revenue growth of 6.2%
-- Restructure and strengthening of regulated activities. One
off investment identified of approximately GBP10.0m, creating a
stable platform for future growth and an enhanced customer
experience. Remediation plan well underway
-- Strong balance sheet with net debt of GBP73.9m (2018:
GBP54.5m) down from GBP86.9m at 31 December 2018
-- Interim dividend maintained at 1.48p (H1 2018: 1.48p)
-- Valuable property portfolio with a net book value GBP312.1m
of freehold and leasehold property (net book value 80p per
share)
Andy Bruce, Chief Executive of Lookers, said:
"Our performance for the first half reflects an ongoing backdrop
of challenging UK market conditions for the sector. Whilst we are
reporting lower profits year-on-year, we have made good progress on
a number of strategic initiatives and have a clear investment plan
to restructure and strengthen our regulated activities. Our balance
sheet remains strong including our valuable property portfolio.
Working closely with our brand partners I am confident in the
long-term prospects for the business. The Board's current outlook
for the full year at the underlying profit before tax level remains
unchanged."
There will be an analyst presentation today at 9.30am, taking
place at MHP Communications, 6 Agar Street, London, WC2N 4HN. The
presentation will also be accessible via a live conference call for
registered participants. To register for the call please contact
MHP Communications on +44 (0)20 3128 8193, or by email on
lookers@MHPC.com.
Enquiries
Lookers Tel: 0161 291 0043
Andy Bruce, Chief Executive Officer
Mark Raban, Chief Financial Officer
MHP Communications Tel: 020 3128 8742 / 8789
Tim Rowntree Email: Lookers@mhpc.com
Simon Hockridge
About Lookers plc (www.lookersplc.com)
The Group's principal activities are the sale of new and used
cars, vans and aftersales activities. The Group's businesses have a
total of 165 franchised dealerships representing 31 manufacturers,
operating from 110 locations across the UK and Republic of
Ireland.
In 2019 Lookers have once again been listed as part of 'The
Sunday Times Best Companies to Work For' ranking of the UK's top
employers. Lookers was the best performing dealer group in the 2019
survey.
Lookers' Apprenticeship Programme continues to be one of the
best in the country, recognised as Highly Commended at the National
Apprenticeship Awards. Once again, the Apprentice intake has
increased in 2019, with over 170 vacancies across the Group.
Cautionary statement
This Interim Report has been prepared solely to provide
additional information to shareholders to assess the Group's
strategies and the potential for those strategies to succeed. The
Interim Report should not be relied on by any party or for any
other purpose.
The Interim Report contains certain forward-looking statements.
These statements are made by the Directors in good faith based on
the information available to them up to the time of their approval
of this report and such statements should be treated with caution
due to the inherent uncertainties, including both economic and
business risk factors, underlying any such forward-looking
information.
Introduction
Our trading performance for the first half of the year reflects
a very challenging economic backdrop and our underlying profit
before tax has reduced year on year to GBP29.2m (2018: GBP40.3m).
Whilst H1 began in line with expectations, trading during the three
months ended 30 June 2019 ("Q2"), against strong comparatives,
proved increasingly challenging. During Q2 the UK new car market
continued to decline, with registrations down -4.6% (Q1: -2.4%)
versus the comparable period last year. In addition, more subdued
demand and the resulting pressure on used car values resulted in a
weaker used car margin, which was most notable during June.
The Group's balance sheet remains strong, underpinned by a
valuable freehold property portfolio, committed and extended bank
funding facilities and strong operational cash flow generation.
Financial review
From 1 January 2019 the Group adopted the new accounting
standard IFRS 16: Leases. This standard introduces a comprehensive
model for the identification of lease arrangements and accounting
treatment for both lessors and lessees. Unless otherwise stated,
the prior period financial comparatives contained within these
statements have been restated to reflect the first-time adoption of
IFRS 16. Further details of this restatement can be found in note
1. At 30 June 2019 the Group has right-of-use assets with a net
book value of GBP81.7m, related lease liabilities of GBP105.1m and
have repaid GBP6.0m of lease liabilities in the Period. In
addition, the Group has reclassified the amortisation of intangible
assets to the underlying earnings of the Group and restated the
financial comparatives accordingly.
Revenue increased by 2.7% to GBP2,646.4m (2018: GBP2,576.5m).
Like-for-like revenue grew 0.1% with encouraging growth in used
cars, aftersales and leasing / other. In particular, our important
high margin aftersales department showed resilient like-for-like
revenue growth of 6.2%.
Gross profit increased by 1.4% to GBP274.2m (2018: GBP270.5m).
Gross margin at 10.4% was -14bps below last year. Used vehicle
gross margin at 6.6% was -60bps below last year being partly offset
by a more favourable aftersales mix.
Underlying net operating expenses of GBP231.4m represented 8.7%
of revenue, which were 6.4% above last year (like-for-like 5.0%).
Inflationary and structural cost pressures continue to impact the
Group particularly in the areas of labour and property occupancy
costs. Recent cost headwinds impacting all retailers have been well
documented and the Group is pursuing several initiatives to
mitigate these effects.
Net interest costs increased in the Period to GBP13.6m (2018:
GBP12.7m) principally due to the increase in the bank base rate in
August 2018 and revised terms of the Group's revolving credit
facility ("RCF").
The Group incurred GBP4.3m of non-underlying costs, including a
charge of GBP2.0m in relation to the restructure of its regulated
activities (discussed further below). This compared to a net
non-underlying profit of GBP1.0m last year including GBP3.3m
relating to profits from the disposal of property.
The Group's reported effective tax rate is 19.3% (2018: 15.5%),
with last year being impacted by property transactions.
The Group maintained a strong level of operational cash flow in
the Period with cash generated from operations of GBP79.0m (2018:
GBP63.1m). We have invested GBP21.7m of capital expenditure during
the Period in improving dealership facilities as part of our
ongoing strategic investment programme. We also received GBP3.4m
from the disposal of two properties. Total net debt at 30 June 2019
was GBP73.9m (2018: GBP54.5m) compared to GBP86.9m at 31 December
2018.
With the reduction in net debt in the Period, the Group
continues to benefit from a strong balance sheet that supports
further investment in new and improved facilities, operational
capabilities and potential acquisition opportunities. The net book
value of freehold and leasehold properties of GBP312.1m (equivalent
to 80p per share) at the end of the Period remains a key strength
of the business.
The Group's bank facilities were renewed in December 2018 and
consist of a revolving credit facility of GBP250.0m arranged with
five banks, (Bank of Ireland, Barclays, HSBC, Lloyds and NatWest),
with a term to March 2022 and an option to extend to March 2023.
There is also an option to increase the facility up to an
additional GBP50.0m to fund potential future acquisitions.
Dividend
In line with the Group's progressive dividend policy the
dividend paid has increased significantly in recent years. Despite
the results for the first half and the challenging trading
conditions, given the Group's strong balance sheet the Board has
decided to maintain the interim dividend this year. The interim
dividend of 1.48p per share (2018: 1.48p) will be payable to
shareholders on 22 November 2019. The ex-dividend date will be 17
October 2019 and the record date will be 18 October 2019. The Board
intends to undertake a review of the current dividend policy in
light of the Group's trading performance and future cash flows
before the publication of the Group's Annual Report &
Accounts.
Board changes
We recently announced that, as part of our succession planning,
Robin Gregson, CFO, was to step down after ten years in the role.
Together with my colleagues on the Board I would like to thank him
for his significant contribution and wish him well in the
future.
We were also pleased to announce the appointment of Mark Raban
as CFO and we welcomed Mark to the Board on 15 July 2019. Mark has
nearly 30 years of multi-channel retail experience and was most
recently CFO at Marshall Motor Holdings plc for four years.
Operating review
The results for the first half reflect the challenging market
conditions experienced during the Period. The key aspects of our
performance were:
-- The Group continued to outperform the UK new car market.
Total like-for-like new car unit volumes were -1.2% down compared
to a UK market decline of -3.4%
-- Continued growth in used car revenue partly offset by margin pressure experienced during Q2
-- Further progress in aftersales driven by a 6.2% growth in like-for-like revenue
We operate 165 franchised dealerships representing 31
manufacturers from 110 locations. During the Period, we continued
our strategy of operating the right brands in the right locations
and reduced the footprint by five dealerships. Following the
acquisition of Jennings in 2018, we have now closed the Seat and
Mazda sites in Middlesbrough and Kia in Sunderland. As part of our
rationalisation programme agreed with Volkswagen, we have closed
two sites: our Morden site where much of the business will transfer
to our flagship Volkswagen Battersea dealership, which opened in
January 2019 after significant redevelopment; and our dealership in
Dumfries where much of the business will transfer to our Volkswagen
dealership in Carlisle.
The number of new cars sold per annum in the UK has reduced from
a peak of 2.69m in 2017 to 2.37m in 2018, with a further reduction
expected this year. Our share of the retail sector of this market
is 6.1% up from 4.0% in 2011. We continue to see significant
opportunity to further grow our market share and increase sales
volumes within the UK used car market, which currently has annual
transactions of approximately 8m vehicles.
Aftersales represents the servicing, repair and sale of
franchised parts. In the UK there are approximately 36m cars and
light commercial vehicles, with a significant proportion under
three years old. This is the predominant market for franchised
motor dealers and we are focused on developing the aftersales
business and investing in our offering through initiatives to
increase volumes and margins.
The internet remains the primary means for our customers to
research and determine which new or used cars they are interested
in buying. We have now migrated to our new and considerably
improved website on a phased basis and this is now fully
operational across all dealerships. This has resulted in further
increases in our visitor and enquiry levels. The customer
experience will be enhanced by further significant improvements in
functionality, which will allow interaction with our customers.
Analysis of revenue and gross profit
Revenue H1 2019 GBPm H1 2018 GBPm Variance LFL variance
New cars 1,288.0 1,311.1 -1.8% -3.4%
------------- ------------- --------- -------------
Used cars 1,067.5 996.3 +7.1% +3.0%
------------- ------------- --------- -------------
Aftersales 247.0 228.0 +8.3% +6.2%
------------- ------------- --------- -------------
Leasing and other 43.9 41.1 +6.8% +6.8%
------------- ------------- --------- -------------
Total 2,646.4 2,576.5 +2.7% +0.1%
------------- ------------- --------- -------------
Gross profit H1 2019 GBPm H1 2018 GBPm Variance LFL variance
New cars 84.9 85.0 -0.1% -2.2%
------------- ------------- --------- -------------
Used cars 70.9 72.1 -1.7% -2.8%
------------- ------------- --------- -------------
Aftersales 109.9 104.9 +4.8% +2.9%
------------- ------------- --------- -------------
Leasing and other 8.5 8.5 -0.6% -0.6%
------------- ------------- --------- -------------
Total 274.2 270.5 +1.4% -0.3%
------------- ------------- --------- -------------
New cars
New cars H1 2019 H1 2018 Variance LFL variance
Retail unit sales 34,459 35,763 -3.6% -5.9%
-------- -------- --------- -------------
Fleet unit sales 33,053 30,872 +7.1% +4.3%
-------- -------- --------- -------------
Total unit sales 67,512 66,635 +1.3% -1.2%
-------- -------- --------- -------------
Gross margin
% 6.6% 6.5% +11bps +8bps
-------- -------- --------- -------------
The sale of new cars represents 31.0% of total gross profit. The
new car market reduced by -3.4% in H1 to 1.27m units, with a
reduction of -2.4% in Q1 and -4.6% in Q2. Q1 benefitted to some
extent from a pre-Brexit pull forward of demand. During H1 we
outperformed the UK market with like-for-like unit sales of new
cars down -1.2% versus last year.
Like-for-like unit retail sales reduced by -5.9% compared to the
market reduction of -3.2%. In Q2 the market was partly inflated by
some dealer pre-registration activity and we took a disciplined
approach to managing our inventory.
The fleet sector continues to represent a significant part of
the market, providing scope for further growth whilst taking a
sustainable and balanced approach to maintaining margins. In H1 the
Group's like-for-like fleet unit sales increased by +4.3% compared
to a market decline of -3.6%.
The Society of Motor Manufacturers and Traders ("SMMT")
estimated in August of this year that new car volumes will be -2.2%
lower for 2019 compared to 2018, at 2.32m units. Nonetheless, this
is still a relatively healthy outlook compared to historic levels
of new car volumes and provides opportunities for us to continue to
increase market share, particularly as the brands in which we have
significant representation tend to outperform the wider market. The
month of September is important for the industry and our new car
order take is currently building as expected. Our relationship with
our manufacturer partners remains a critical part of our success
and we continue to work closely with them to achieve a mutually
beneficial commercial relationship, underpinning the potential to
develop further with them in the future.
Used cars
Used cars H1 2019 H1 2018 Variance LFL variance
Retail unit sales 54,088 51,943 +4.1% +2.0%
-------- -------- --------- -------------
Gross margin
% 6.6% 7.2% -60bps -40bps
-------- -------- --------- -------------
The used car market had a mixed performance in the Period with a
robust Q1, followed by reduced demand and falling used cars prices
in Q2. This had a pronounced impact on margins and used car
profits. Used cars contribute 25.9% of total gross profit.
Group like-for-like used unit sales increased by 2.0%, compared
to last year. However, gross margin from used cars deteriorated
during the Period by -60bps, principally driven by used vehicle
residual value pressure in Q2. Given the effect this had on used
car pricing in June, we took a disciplined approach to managing
inventories in the month, which had a negative impact on
profitability but mitigated against further residual value
pressures.
The used car market represents a significant opportunity for the
Group and we plan to continue to grow our used car business,
building on the successful growth we have achieved in recent
years.
Aftersales
Aftersales H1 2019 H1 2018 Variance LFL variance
Revenue GBPm 247.0 228.0 +8.3% +6.2%
-------- -------- --------- -------------
Gross margin
% 44.5% 46.0% -150bps -140bps
-------- -------- --------- -------------
Our higher margin aftersales business, which represents 40.1% of
gross profit, has performed well in the Period.
Like-for-like revenue increased by 6.2% compared to 2018 and
gross profit decreased by -140bps largely due to a one-off parts
volume bonus received in H1 2018. Excluding the impact of this, the
underlying margin was broadly level. We have increased capacity
when developing new dealership premises in recent years, which has
expanded the base infrastructure to support higher volumes and
growth in the car parc. In addition, aftersales has also benefited
from the initiatives we have implemented to develop our services,
with an emphasis on performance and improved customer retention
through enhanced technology, as well as an increase in the
penetration of customer service plans sold.
Risks and uncertainties
There are a number of potential risks and uncertainties which
could have a material impact on the Group's performance over the
remaining six months of the financial year and could cause actual
results to differ materially from expected and historical results.
The Board believes these risks and uncertainties to be consistent
with those disclosed on pages 34 to 36 in the 2018 Annual Report
& Accounts. Notwithstanding this, the Board believe that the
adverse risk factors associated with Brexit have generally
increased during the Period. An update on the risks associated with
the review of regulated activities are discussed below.
Review of regulated activities
As previously announced, during 2018 the Board became aware of
certain matters requiring review in relation to the Group's
regulated activities. In December 2018, the Board commissioned an
independent review of the Group's internal control, risk assurance
systems and internal audit. This review, which we shared with the
FCA, indicated that there were some control issues in the sales
process in the Group's regulated activities, which would require an
improvement plan to be implemented.
The Group has now finalised its improvement and remedial action
plan. It is anticipated to require a one-off cash investment of
c.GBP10m (2019: c.GBP7m, 2020: c.GBP3m). The remediation plan will
include a detailed review of past business; establishment of a
revised sales process; a full training exercise across the Group;
establishment of a new risk management and quality assurance
frameworks; and several developments to the Group's IT systems. In
addition to this one-off investment, ongoing underlying operating
costs in 2020 and beyond are expected to increase by c.GBP3m per
annum to deliver best practice and an enhanced customer
experience.
Of the anticipated c.GBP7m one-off investment in 2019, GBP2m has
been included within non-underlying items in the Period.
As announced on 25 June 2019, the Group has been informed by the
FCA that it intends to carry out an investigation into sales
processes between the period of 1 January 2016 to 13 June 2019.
This investigation has not yet started. With the full support of
the Group, the FCA will reach its conclusions in due course. At
this stage the Board cannot estimate what effect, if any, the
outcome of this investigation may have.
The Board takes this matter very seriously and continues to
co-operate and co-ordinate fully with the FCA. We believe that
adapting to developments in regulation, which affects the retail
motor industry and the fast pace of changing customer demands and
behaviours, is a key challenge and an important priority for the
Group. When these improvements are fully deployed across the Group,
our strengthened infrastructure and enhanced customer experience
will create a robust and industry leading platform that will
facilitate further growth.
We will provide further updates as appropriate.
Outlook
Despite the more challenging market conditions in H1,
particularly Q2, the Group has maintained its strategy of strong
operational execution and a focus on having the right brands in the
right locations.
As outlined in the Group's trading statement on 12 July 2019,
the Board expects that the more recent challenging conditions are
likely to continue during the second half of the year with
continued weakness in consumer confidence in the light of political
and economic uncertainty and further pressure on used car margins.
There is also the possibility of new vehicle supply restrictions as
real-life emissions regulations come into force in Q3. In addition,
the retail cost inflation pressure experienced in H1 could continue
to impact earnings during the second half of the year.
As a result of the above factors, the Board believes it is right
to remain cautious as we enter the second half of the year.
However, the Board's current outlook for underlying profit before
tax for the full year remains unchanged.
Notwithstanding the short-term challenges of H1 and the
uncertain outlook for the second half of the year, the Board
continues to believe that over the longer term, the Group is
extremely well positioned to take advantage of the many
opportunities ahead as the sector continues to develop. The Group
continues to make significant investments in upgrading its property
portfolio and enhancing customer experience. The Group's balance
sheet remains strong, underpinned by a valuable freehold property
portfolio, committed and extended bank funding facilities and
strong operational cash flow capability.
I would like to finish my review by thanking all of my
colleagues at Lookers and our OEM brand partners for their hard
work, commitment and dedication to the Group.
Phil White
Chairman
13 August 2019
Condensed Statement of Total Comprehensive Income
Unaudited Unaudited Year ended
six months six months
ended ended
30 June 30 June 31 Dec 2018
2019 2018 (restated**) (restated**)
GBPm
GBPm
Note GBPm
--------------------------------------------- ----- ------------ ------------------- --------------
Revenue 2 2,646.4 2,576.5 4,879.5
--------------------------------------------- ----- ------------ ------------------- --------------
Cost of sales (2,372.2) (2,306.0) (4,364.0)
--------------------------------------------- ----- ------------ ------------------- --------------
Gross profit 274.2 270.5 515.5
--------------------------------------------- ----- ------------ ------------------- --------------
Net operating expenses (234.2) (218.4) (443.6)
--------------------------------------------- ----- ------------ ------------------- --------------
(Loss)/gain on property disposals (0.3) 3.3 3.3
--------------------------------------------- ----- ------------ ------------------- --------------
Operating profit 39.7 55.4 75.2
--------------------------------------------- ----- ------------ ------------------- --------------
Underlying operating profit 42.8 53.0 78.3
Non-underlying items 3 (3.1) 2.4 (3.1)
--------------------------------------------- ----- ------------ ------------------- --------------
Net interest 4 (13.6) (12.7) (24.4)
--------------------------------------------- ----- ------------ ------------------- --------------
Net interest on pension scheme obligations (1.0) (1.2) (1.7)
--------------------------------------------- ----- ------------ ------------------- --------------
Debt issue costs (0.2) (0.2) (0.5)
--------------------------------------------- ----- ------------ ------------------- --------------
Profit before taxation 24.9 41.3 48.6
--------------------------------------------- ----- ------------ ------------------- --------------
Underlying profit before tax 29.2 40.3 53.9
Non-underlying items 3 (4.3) 1.0 (5.3)
--------------------------------------------- ----- ------------ ------------------- --------------
Tax change (4.8) (6.4) (8.8)
--------------------------------------------- ----- ------------ ------------------- --------------
Profit for the period/year 20.1 34.9 39.8
--------------------------------------------- ----- ------------ ------------------- --------------
Actuarial (losses)/gains on pension
scheme obligations* (1.7) 4.0 (7.2)
Deferred tax on pension scheme obligations* 0.3 0.0 1.2
--------------------------------------------- ----- ------------ ------------------- --------------
Total other comprehensive income for
the period/year (1.4) 4.0 (6.0)
--------------------------------------------- ----- ------------ ------------------- --------------
Total comprehensive income for the
period/year 18.7 38.9 33.8
--------------------------------------------- ----- ------------ ------------------- --------------
Attributable to: 18.7 38.9 33.8
--------------------------------------------- ----- ------------ ------------------- --------------
Shareholders of the company
--------------------------------------------- ----- ------------ ------------------- --------------
Earnings per share:
--------------------------------------------- ----- ------------ ------------------- --------------
Basic earnings per share 6 5.17p 8.80p 10.12p
--------------------------------------------- ----- ------------ ------------------- --------------
Diluted earnings per share 6 4.99p 8.48p 9.67p
--------------------------------------------- ----- ------------ ------------------- --------------
*Will not be recycled to profit and loss
**Details of the restatements as a result of the adoption of
IFRS 16 are made in note 1 to the Financial Information
Condensed Statement of Financial Position
Unaudited Unaudited Audited
30 June 30 June 31 Dec 2018
2019 2018 (restated**) (restated**)
GBPm
Note GBPm GBPm
------------------------------- ----- ---------- ------------------- --------------
Non-current assets
------------------------------- ----- ---------- ------------------- --------------
Goodwill 116.2 108.9 116.2
------------------------------- ----- ---------- ------------------- --------------
Intangible assets 7 115.4 114.0 114.6
------------------------------- ----- ---------- ------------------- --------------
Property, plant and equipment 8 364.5 341.1 350.9
------------------------------- ----- ---------- ------------------- --------------
Right of use assets 81.7 87.0 86.9
------------------------------- ----- ---------- ------------------- --------------
677.8 651.0 668.6
------------------------------- ----- ---------- ------------------- --------------
Current assets
------------------------------- ----- ---------- ------------------- --------------
Inventories 990.9 864.6 1,027.7
------------------------------- ----- ---------- ------------------- --------------
Trade and other receivables 302.3 251.7 179.5
------------------------------- ----- ---------- ------------------- --------------
Rental fleet vehicles 64.2 66.7 54.2
------------------------------- ----- ---------- ------------------- --------------
Cash and cash equivalents 10 93.6 56.2 44.4
------------------------------- ----- ---------- ------------------- --------------
Assets held for sale 9 6.5 - 8.0
------------------------------- ----- ---------- ------------------- --------------
1,457.5 1,239.2 1,313.8
------------------------------- ----- ---------- ------------------- --------------
Total assets 2,135.3 1,890.2 1,982.4
------------------------------- ----- ---------- ------------------- --------------
Current liabilities
------------------------------- ----- ---------- ------------------- --------------
Bank loans and overdrafts 10 13.0 13.2 2.6
------------------------------- ----- ---------- ------------------- --------------
Trade and other payables 1,340.2 1,146.5 1,235.7
------------------------------- ----- ---------- ------------------- --------------
Provisions 2.0 - -
------------------------------- ----- ---------- ------------------- --------------
Lease liabilities 9.7 10.0 10.0
------------------------------- ----- ---------- ------------------- --------------
Current tax payable 1.4 4.9 0.1
------------------------------- ----- ---------- ------------------- --------------
1,366.3 1,174.6 1,248.4
------------------------------- ----- ---------- ------------------- --------------
Net current assets 91.2 64.6 65.4
------------------------------- ----- ---------- ------------------- --------------
Non-current liabilities
------------------------------- ----- ---------- ------------------- --------------
Bank loans 10 154.5 97.5 128.7
------------------------------- ----- ---------- ------------------- --------------
Trade and other payables 25.2 25.1 19.4
------------------------------- ----- ---------- ------------------- --------------
Lease liabilities 95.4 100.2 100.2
------------------------------- ----- ---------- ------------------- --------------
Pension scheme obligations 67.4 61.0 68.9
------------------------------- ----- ---------- ------------------- --------------
Deferred tax liabilities 40.3 38.8 40.0
------------------------------- ----- ---------- ------------------- --------------
382.8 322.6 357.2
------------------------------- ----- ---------- ------------------- --------------
Total liabilities 1,749.1 1,497.2 1,605.6
------------------------------- ----- ---------- ------------------- --------------
Net assets 386.2 393.0 376.8
------------------------------- ----- ---------- ------------------- --------------
Shareholders' equity
------------------------------- ----- ---------- ------------------- --------------
Ordinary share capital 11 19.4 19.7 19.4
------------------------------- ----- ---------- ------------------- --------------
Share premium 78.4 78.4 78.4
------------------------------- ----- ---------- ------------------- --------------
Capital redemption reserve 15.1 14.8 15.1
------------------------------- ----- ---------- ------------------- --------------
Retained earnings 273.3 280.1 263.9
------------------------------- ----- ---------- ------------------- --------------
Total equity 386.2 393.0 376.8
------------------------------- ----- ---------- ------------------- --------------
**Details of the restatements following the adoption of IFRS 16
are made in note 1 to the Financial Information. In addition,
comparatives within the interim period ending 30 June 2018 have
been restated to reflect the presentation of the RCF as non-current
rather than current liabilities.
Condensed Statement of Changes in Equity
Share Share Capital Retained Total
Period to 30 June 2019 (unaudited) capital premium redemption earnings equity
reserve
GBPm GBPm GBPm GBPm GBPm
-------------------------------------- ---------- ---------- ------------- ----------- ---------
As at 1 January 2019 19.4 78.4 15.1 263.9 376.8
--------------------------------------- ---------- ---------- ------------- ----------- ---------
Profit for the period - - - 20.1 20.1
--------------------------------------- ---------- ---------- ------------- ----------- ---------
Total other comprehensive
income for the period - - - (1.4) (1.4)
--------------------------------------- ---------- ---------- ------------- ----------- ---------
Share based compensation - - - 0.8 0.8
--------------------------------------- ---------- ---------- ------------- ----------- ---------
Dividends paid - - - (10.1) (10.1)
--------------------------------------- ---------- ---------- ------------- ----------- ---------
As at 30 June 2019 19.4 78.4 15.1 273.3 386.2
--------------------------------------- ---------- ---------- ------------- ----------- ---------
Period to 30 June 2018 (unaudited)
-------------------------------------- ---------- ---------- ------------- ----------- ---------
As at 1 January 2018 19.9 78.4 14.6 272.2 385.1
--------------------------------------- ---------- ---------- ------------- ----------- ---------
Effects of new accounting
standards - IFRS 16 - - - (18.9) (18.9)
--------------------------------------- ---------- ---------- ------------- ----------- ---------
As at 1 January 2018 (restated) 19.9 78.4 14.6 253.3 366.2
--------------------------------------- ---------- ---------- ------------- ----------- ---------
Profit for the period - - - 34.9 34.9
--------------------------------------- ---------- ---------- ------------- ----------- ---------
Total other comprehensive
income for the period - - - 4.0 4.0
--------------------------------------- ---------- ---------- ------------- ----------- ---------
Share based compensation - - - 0.9 0.9
--------------------------------------- ---------- ---------- ------------- ----------- ---------
Share buy-back (0.2) - 0.2 (3.2) (3.2)
--------------------------------------- ---------- ---------- ------------- ----------- ---------
Dividends paid - - - (9.8) (9.8)
--------------------------------------- ---------- ---------- ------------- ----------- ---------
As at 30 June 2018 (restated) 19.7 78.4 14.8 280.1 393.0
--------------------------------------- ---------- ---------- ------------- ----------- ---------
Year to 31 December 2018 (audited)
-------------------------------------- ---------- ---------- ------------- ----------- ---------
As at 1 January 2018 19.9 78.4 14.6 272.2 385.1
--------------------------------------- ---------- ---------- ------------- ----------- ---------
Effects of new accounting
standards - IFRS 16 - - - (18.9) (18.9)
--------------------------------------- ---------- ---------- ------------- ----------- ---------
As 1 January 2018 (restated) 19.9 78.4 14.6 253.3 366.2
--------------------------------------- ---------- ---------- ------------- ----------- ---------
Profit for the year - - - 39.8 39.8
--------------------------------------- ---------- ---------- ------------- ----------- ---------
Total other comprehensive
income for the year - - - (6.0) (6.0)
--------------------------------------- ---------- ---------- ------------- ----------- ---------
New shares issued 0.0 0.0 - - 0.0
--------------------------------------- ---------- ---------- ------------- ----------- ---------
Share based compensation - - - 1.7 1.7
--------------------------------------- ---------- ---------- ------------- ----------- ---------
Share buy-back (0.5) - 0.5 (9.3) (9.3)
--------------------------------------- ---------- ---------- ------------- ----------- ---------
Dividends paid - - - (15.6) (15.6)
--------------------------------------- ---------- ---------- ------------- ----------- ---------
As at 31 December 2018 (restated) 19.4 78.4 15.1 263.9 376.8
--------------------------------------- ---------- ---------- ------------- ----------- ---------
Condensed Statement of Cash Flows
Unaudited Unaudited Year ended
Six months Six months 31 Dec 2018
ended 30 ended 30 (restated**)
June June
2019 2018
(restated**)
GBPm
Note GBPm GBPm
------------------------------------------- ----- ------------ --------------- --------------
Cash flows from operating activities
------------------------------------------- ----- ------------ --------------- --------------
Profit for the period/year 20.1 34.9 39.8
------------------------------------------- ----- ------------ --------------- --------------
Tax charge 4.8 6.4 8.8
------------------------------------------- ----- ------------ --------------- --------------
Depreciation of property, plant and
equipment 15.9 15.3 30.9
------------------------------------------- ----- ------------ --------------- --------------
Loss/(profit) on disposal of property,
plant and equipment 0.3 4.1 (3.8)
------------------------------------------- ----- ------------ --------------- --------------
Amortisation of intangible assets 7 3.3 2.7 5.6
------------------------------------------- ----- ------------ --------------- --------------
Share based compensation 0.8 0.9 1.7
------------------------------------------- ----- ------------ --------------- --------------
Interest income (0.1) - (0.3)
------------------------------------------- ----- ------------ --------------- --------------
Interest payable 13.7 12.7 24.7
------------------------------------------- ----- ------------ --------------- --------------
Debt issue costs 0.2 0.2 0.5
------------------------------------------- ----- ------------ --------------- --------------
Difference between pension charge
and cash contributions (2.9) (1.6) (2.1)
------------------------------------------- ----- ------------ --------------- --------------
Movement in provisions 2.0 - -
------------------------------------------- ----- ------------ --------------- --------------
Changes in inventories 36.8 119.5 1.4
------------------------------------------- ----- ------------ --------------- --------------
Changes in receivables (127.2) (24.8) 48.9
------------------------------------------- ----- ------------ --------------- --------------
Changes in payables 111.3 (107.2) (60.4)
------------------------------------------- ----- ------------ --------------- --------------
Cash generated from operations 79.0 63.1 95.7
------------------------------------------- ----- ------------ --------------- --------------
Purchase of rental fleet vehicles (51.5) (52.7) (89.4)
------------------------------------------- ----- ------------ --------------- --------------
Proceeds from sale of rental fleet
vehicles 38.7 52.6 90.3
------------------------------------------- ----- ------------ --------------- --------------
Interest paid (13.9) (12.9) (24.7)
------------------------------------------- ----- ------------ --------------- --------------
Interest received 0.1 - 0.3
------------------------------------------- ----- ------------ --------------- --------------
Tax paid (3.2) (0.4) (7.1)
------------------------------------------- ----- ------------ --------------- --------------
Net cash inflow from operating activities 49.2 49.7 65.1
------------------------------------------- ----- ------------ --------------- --------------
Cash flows from investing activities
------------------------------------------- ----- ------------ --------------- --------------
Purchase of property, plant and equipment 8 (21.7) (14.0) (25.7)
------------------------------------------- ----- ------------ --------------- --------------
Purchase of intangibles 7 (1.8) (4.4) (7.9)
------------------------------------------- ----- ------------ --------------- --------------
Purchase of subsidiaries net of cash
received - - (13.7)
------------------------------------------- ----- ------------ --------------- --------------
Proceeds from disposal of property,
plant and equipment 3.4 29.7 35.1
------------------------------------------- ----- ------------ --------------- --------------
Net cash (outflow)/inflow from investing
activities (20.1) 11.3 (12.2)
------------------------------------------- ----- ------------ --------------- --------------
Cash flows from financing activities
------------------------------------------- ----- ------------ --------------- --------------
Proceeds from issue of ordinary shares - - 0.0
------------------------------------------- ----- ------------ --------------- --------------
Redemption of ordinary shares - (3.2) (9.3)
------------------------------------------- ----- ------------ --------------- --------------
Repayment of loans 10 (0.5) (6.1) (14.6)
------------------------------------------- ----- ------------ --------------- --------------
Draw down on RCF 10 117.0 32.0 135.3
------------------------------------------- ----- ------------ --------------- --------------
Repayment on RCF 10 (90.0) (52.0) (134.1)
------------------------------------------- ----- ------------ --------------- --------------
Repayment of lease liabilities 10 (6.0) (4.7) (10.2)
------------------------------------------- ----- ------------ --------------- --------------
Dividends paid 5 (10.1) (9.8) (15.6)
------------------------------------------- ----- ------------ --------------- --------------
Net cash inflow/(outflow) from financing
activities 10.4 (43.8) (48.5)
------------------------------------------- ----- ------------ --------------- --------------
Increase in cash and cash equivalents 39.5 17.2 4.4
------------------------------------------- ----- ------------ --------------- --------------
Cash and cash equivalents at 1 January 43.3 38.9 38.9
------------------------------------------- ----- ------------ --------------- --------------
Cash and cash equivalents at 30 June/31
December 82.8 56.1 43.3
------------------------------------------- ----- ------------ --------------- --------------
Analysis of cash and cash equivalents
------------------------------------------- ----- ------------ --------------- --------------
Cash and cash equivalents 10 93.6 56.2 44.4
------------------------------------------- ----- ------------ --------------- --------------
Bank overdraft 10 (10.8) (0.1) (1.1)
------------------------------------------- ----- ------------ --------------- --------------
Cash and cash equivalents at 30 June/31
December 82.8 56.1 43.3
------------------------------------------- ----- ------------ --------------- --------------
*Details of the restatement following the adoption of IFRS 16
are made in note 1 to the Financial Information. In addition,
comparatives within the interim period ending 30 June 2018 have
been restated to reflect the presentation of the RCF as non-current
rather than current liabilities.
Notes to the Financial Information
1. General information
Lookers plc is a public limited company incorporated in the
United Kingdom under the Companies Act 2006, with registered number
111876 in England and Wales and a registered office of Lookers
House, 3 Etchells Road, West Timperley, Altrincham, WA14 5XS.
The financial information for the six months ended 30 June 2019
and 30 June 2018 is unaudited. The financial information for the
year ending 31 December 2018 has been based on the audited
financial statements for that year.
The information for the year ended 31 December 2018 and the
Interim Report for the period ended 30 June 2019 does not
constitute statutory accounts as defined in section 434 of the
Companies Act 2006. A copy of the statutory accounts for that year
has been delivered to the Registrar of Companies and was filed on
15 July 2019. The auditor's report on those accounts was not
qualified, did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying the
report and did not contain statements under section 498 (2) or (3)
of the Companies Act 2006.
Accounting policies
The annual financial statements of Lookers plc are prepared in
accordance with IFRSs as adopted by the European Union. The set of
condensed financial statements included in this Interim Report has
been prepared in accordance with International Accounting Standards
34 'Interim Financial Reporting', as adopted by the European Union.
Save for the implementation of IFRS 16 'Leases' which is discussed
further below, the same accounting policies, presentation and
methods of computation are followed in the Interim Report as
applied in the Group's latest annual audited financial
statements.
Going concern
This financial information has been prepared on a going concern
basis which the Directors believe to be appropriate. This
conclusion is based on, amongst other matters, a review of the
Group's financial projections together with a review of the cash
and committed borrowing facilities available to the Group.
At 30 June 2019 the banking facilities included a revolving
credit facility of up to GBP250.0m, with a further GBP50.0m
available for future acquisitions. These facilities are not due for
renewal until March 2022.
At 30 June 2019 the Group had Net debt of GBP73.9m.
Alternative Performance Measures
The Group uses a number of Alternative Performance Measures
(APMs) which are non-IFRS measures in order to monitor the
performance of its operations. The Group makes certain adjustments
to statutory profit measures in order to derive many of these
APM's. The Group's policy is to exclude items that are considered
to be significant in nature and/or quantum. The Group believes
these APM's provide useful historical financial information to
assist investors and other stakeholders to evaluate the performance
of the business and are measures commonly used by certain investors
for evaluating the performance of the Group.
The key APM's used by the group include like-for-like sales,
gross profit margin, underlying operating profit, underlying profit
before tax and net debt. Each of the APM's and others used by the
Group are set out in the Glossary including explanations of how
they are calculated and how they can be reconciled to a statutory
measure where relevant.
IFRS 16
The Group has applied IFRS 16 for the first time in the Period.
IFRS 16 introduces new or amended requirements with respect to
lease accounting. It introduces significant changes to the lessee
accounting by removing the distinction between operating and
finance leases and requiring the recognition of a right-of-use
asset and a lease liability at the lease commencement for all
leases, except for short-term leases and leases of low value
assets.
The Group has elected to apply the full retrospective
implementation approach with restatement of the comparative
information. The date of initial application is 1 January 2017.
IFRS 16 changes how the Group accounts for leases previously
classified as operating leases under IAS 17, which were
off-balance-sheet. Applying IFRS 16, for all leases (except as
noted below), the Group:
a) recognises right-of-use assets and lease liabilities in the
Statement of Financial Position, initially measured at the present
value of future lease payments;
b) recognises depreciation of right-of-use assets and interest
on lease liabilities in the Statement of Total Comprehensive
Income; and
c) separates the total amount of cash paid into a principal
portion (presented within financing activities) and interest
(presented within operating activities) in the Statement of Cash
Flows.
Lease incentives (e.g. free rent period) are recognised as part
of the measurement of the right-of-use assets and lease liabilities
whereas under IAS 17 they resulted in the recognition of a lease
incentive liability, amortised as a reduction of rental expense on
a straight-line basis. Under IFRS 16, right-of-use assets are
tested for impairment in accordance with IAS 36 Impairment of
Assets. This replaces the previous requirement to recognise a
provision for onerous lease contracts. For short--term leases
(lease term of 12 months or less) and leases of low-value assets
(such as personal computers and office furniture), the Group has
opted to recognise a lease expense on a straight-line basis as
permitted by IFRS 16. This expense is presented within net
operating expenses in the Statement of Total Comprehensive
Income.
The Group assesses whether a contract is or contains a lease, at
inception of a contract. The Group recognises a right-of-use asset
and a corresponding lease liability with respect to all lease
agreements in which it is the lessee, except for short-term leases
(defined as leases with a lease term of 12 months or less) and
leases of low value assets. For these leases, the Group recognises
the lease payments as an operating expense on a straight-line basis
over the term of the lease unless another systematic basis is more
representative of the time pattern in which economic benefits from
the leased asset are consumed.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. If this rate
cannot be readily determined, the Group uses its incremental
borrowing rate. The weighted average incremental borrowing rate
applied to lease liabilities is 5.40%.
Lease payments included in the measurement of the lease
liability comprise:
-- fixed lease payments (including in-substance fixed payments), less any lease incentives;
-- variable lease payments that depend on an index or rate,
initially measured using the index or rate at the commencement
date;
-- the amount expected to be payable by the lessee under residual value guarantees;
-- the exercise price of purchase options, if the lessee is
reasonably certain to exercise the options; and
-- payments of penalties for terminating the lease, if the lease
term reflects the exercise of an option to terminate the lease.
The lease liability is presented as a separate line in the
Statement of Financial Position. The lease liability is
subsequently measured by increasing the carrying amount to reflect
interest on the lease liability (using the effective interest
method) and by reducing the carrying amount to reflect the lease
payments made.
The Group remeasures the lease liability (and makes a
corresponding adjustment to the related right-of-use asset)
whenever:
-- the lease term has changed or there is a change in the
assessment of exercise of a purchase option, in which case the
lease liability is remeasured by discounting the revised lease
payments using a revised discount rate.
-- the lease payments change due to changes in an index or rate
or a change in expected payment under a guaranteed residual value,
in which cases the lease liability is remeasured by discounting the
revised lease payments using the initial discount rate (unless the
lease payments change is due to a change in a floating interest
rate, in which case a revised discount rate is used).
-- a lease contract is modified and the lease modification is
not accounted for as a separate lease, in which case the lease
liability is remeasured by discounting the revised lease payments
using a revised discount rate.
The Group did not make any such adjustments during the periods
presented.
The right-of-use assets comprise the initial measurement of the
corresponding lease liability, lease payments made at or before the
commencement day and any initial direct costs. They are
subsequently measured at cost less accumulated depreciation and
impairment losses.
Whenever the Group incurs an obligation for costs to dismantle
and remove a leased asset, restore the site on which it is located
or restore the underlying asset to the condition required by the
terms and conditions of the lease, a provision is recognised and
measured under IAS 37. The costs are included in the related
right-of-use asset, unless those costs are incurred to produce
inventories.
Right-of-use assets are depreciated over the shorter period of
lease term and useful life of the underlying asset. If a lease
transfers ownership of the underlying asset or the cost of the
right-of-use asset reflects that the Group expects to exercise a
purchase option, the related right-of-use asset is depreciated over
the useful life of the underlying asset. The depreciation starts at
the commencement date of the lease. The right-of-use assets are
presented as a separate line in the Statement of Financial
Position. The Group applies IAS 36 Impairment of Assets to
determine whether a right-of-use asset is impaired and accounts for
any identified impairment loss.
A reconciliation of total operating lease commitments to the
IFRS 16 lease liability at 1 January 2019 is as follows:
GBPm
-------------------------------------------------------- -------
Operating lease commitments disclosed at 31 December
2018 172.6
-------------------------------------------------------- -------
Less: discount effect using incremental borrowing rate (60.7)
-------------------------------------------------------- -------
Less: short term leases recognised on a straight-line
basis as expense (0.7)
-------------------------------------------------------- -------
Less: low value leases recognised on a straight-line
basis as expense (1.0)
-------------------------------------------------------- -------
Lease liability recognised at 1 January 2019 110.2
-------------------------------------------------------- -------
Of which are:
-------------------------------------------------------- -------
Current lease liabilities 10.0
-------------------------------------------------------- -------
Non-current lease liabilities 100.2
-------------------------------------------------------- -------
110.2
-------------------------------------------------------- -------
In addition to the recognition of right-of-use assets, lease
liabilities and adjustments to net operating expenses for operating
lease costs and depreciation coupled with adjustments to finance
expenses, the gains on property disposals arising from sale and
leaseback transactions have been remeasured under the new standard.
The following reconciliations detail the impact of the adoption of
IFRS 16 on the previously reported Statement of Total Comprehensive
Income, the Statement of Financial Position and the Statement of
Cash Flows for the period ending 30 June 2018 and year ending 31
December 2018.
Unaudited
Unaudited six months
six months Impact of ended
ended IFRS 16 30 June
30 June 2018
2018* GBPm (restated)
Period to 30 June 2018 GBPm GBPm
-------------------------------------------- ------------- ------------ ------------
Revenue 2,576.5 - 2,576.5
--------------------------------------------- ------------- ------------ ------------
Cost of sales (2,306.0) - (2,306.0)
--------------------------------------------- ------------- ------------ ------------
Gross profit 270.5 - 270.5
--------------------------------------------- ------------- ------------ ------------
Net operating expenses (221.3) 2.9 (218.4)
--------------------------------------------- ------------- ------------ ------------
Gain on property disposals 7.6 (4.3) 3.3
--------------------------------------------- ------------- ------------ ------------
Operating profit 56.8 (1.4) 55.4
--------------------------------------------- ------------- ------------ ------------
Underlying operating profit 50.1 2.9 53.0
Non-underlying items 6.7 (4.3) 2.4
--------------------------------------------- ------------- ------------ ------------
Net interest (9.7) (3.0) (12.7)
--------------------------------------------- ------------- ------------ ------------
Net interest on pension scheme obligations (1.2) - (1.2)
--------------------------------------------- ------------- ------------ ------------
Debt issue costs (0.2) - (0.2)
--------------------------------------------- ------------- ------------ ------------
Profit before taxation 45.7 (4.4) 41.3
--------------------------------------------- ------------- ------------ ------------
Underlying profit before tax 40.4 (0.1) 40.3
Non-underlying items 5.3 (4.3) 1.0
--------------------------------------------- ------------- ------------ ------------
Tax charge (7.2) 0.8 (6.4)
--------------------------------------------- ------------- ------------ ------------
Profit for the period/year 38.5 (3.6) 34.9
--------------------------------------------- ------------- ------------ ------------
Actuarial (losses)/gains on pension
scheme obligation 4.0 - 4.0
Deferred tax on pension scheme obligations - - -
-------------------------------------------- ------------- ------------ ------------
Total other comprehensive income for
the year period/year 4.0 - 4.0
--------------------------------------------- ------------- ------------ ------------
Total comprehensive income for the
period/year 42.5 (3.6) 38.9
--------------------------------------------- ------------- ------------ ------------
Attributable to:
-------------------------------------------- ------------- ------------ ------------
Shareholders of the company 42.5 (3.6) 38.9
--------------------------------------------- ------------- ------------ ------------
Earnings per share:
-------------------------------------------- ------------- ------------ ------------
Basic earnings per share 9.71p 8.80p
--------------------------------------------- ------------- ------------ ------------
Diluted earnings per share 9.35p 8.48p
--------------------------------------------- ------------- ------------ ------------
*Amortisation of intangible assets have been restated to be
included in the underlying financial performance.
Audited Year ended
year ended Impact of 31 Dec 2018
31 Dec 2018 IFRS 16 (restated)
Year to 31 December 2018 GBPm GBPm GBPm
-------------------------------------------- ---- -------------- ----------- --------------
Revenue 4,879.5 - 4,879.5
-------------------------------------------------- -------------- ----------- --------------
Cost of sales (4,364.0) - (4,364.0)
-------------------------------------------------- -------------- ----------- --------------
Gross profit 515.5 - 515.5
-------------------------------------------------- -------------- ----------- --------------
Net operating expenses (449.6) 6.0 (443.6)
-------------------------------------------------- -------------- ----------- --------------
Gain on property disposals 7.7 (4.4) 3.3
-------------------------------------------------- -------------- ----------- --------------
Operating profit 73.6 1.6 75.2
-------------------------------------------------- -------------- ----------- --------------
Underlying operating profit 72.3 6.0 78.3
Non-underlying items 1.3 (4.4) (3.1)
-------------------------------------------------- -------------- ----------- --------------
Net interest (18.3) (6.1) (24.4)
-------------------------------------------------- -------------- ----------- --------------
Net interest on pension scheme obligations (1.7) - (1.7)
-------------------------------------------------- -------------- ----------- --------------
Debt issue costs (0.5) - (0.5)
-------------------------------------------------- -------------- ----------- --------------
Profit before taxation 53.1 (4.5) 48.6
-------------------------------------------------- -------------- ----------- --------------
Underlying profit before tax 54.0 (0.1) 53.9
Non-underlying items (0.9) (4.4) (5.3)
-------------------------------------------------- -------------- ----------- --------------
Tax charge (9.6) 0.8 (8.8)
-------------------------------------------------- -------------- ----------- --------------
Profit for the period/year 43.5 (3.7) 39.8
-------------------------------------------------- -------------- ----------- --------------
Actuarial (losses)/gains on pension
scheme obligation (7.2) - (7.2)
Deferred tax on pension scheme obligations 1.2 - 1.2
-------------------------------------------------- -------------- ----------- --------------
Total other comprehensive income for
the year period/year (6.0) - (6.0)
-------------------------------------------------- -------------- ----------- --------------
Total comprehensive income for the
period/year 37.5 (3.7) 33.8
-------------------------------------------------- -------------- ----------- --------------
Attributable to:
-------------------------------------------- ---- -------------- ----------- --------------
Shareholders of the company 37.5 (3.7) 33.8
-------------------------------------------------- -------------- ----------- --------------
Earnings per share:
-------------------------------------------- ---- -------------- ----------- --------------
Basic earnings per share 11.07p 10.12p
-------------------------------------------------- -------------- ----------- --------------
Diluted earnings per share 10.59p 9.67p
-------------------------------------------------- -------------- ----------- --------------
*Amortisation of intangible assets have been restated to be
included in the underlying financial performance.
Unaudited
30 June Unaudited
2018 Impact of 30 June 2018
(restated*) IFRS 16 (restated)
Statement of Financial Position at GBPm GBPm GBPm
30 June 2018
------------------------------------ ------------- ----------- ---------------
Non-current assets
------------------------------------ ------------- ----------- ---------------
Goodwill 108.9 - 108.9
------------------------------------ ------------- ----------- ---------------
Intangible assets 114.0 - 114.0
------------------------------------ ------------- ----------- ---------------
Property, plant and equipment 341.1 - 341.1
------------------------------------ ------------- ----------- ---------------
Right of use assets - 87.0 87.0
------------------------------------ ------------- ----------- ---------------
564.0 87.0 651.0
------------------------------------ ------------- ----------- ---------------
Current assets
------------------------------------ ------------- ----------- ---------------
Inventories 864.6 - 864.6
------------------------------------ ------------- ----------- ---------------
Trade and other receivables 251.7 - 251.7
------------------------------------ ------------- ----------- ---------------
Rental fleet vehicles 66.7 - 66.7
------------------------------------ ------------- ----------- ---------------
Cash and cash equivalents 56.2 - 56.2
------------------------------------ ------------- ----------- ---------------
Assets held for sale - - -
------------------------------------ ------------- ----------- ---------------
1,239.2 - 1,239.2
------------------------------------ ------------- ----------- ---------------
Total assets 1,803.2 87.0 1,890.2
------------------------------------ ------------- ----------- ---------------
Current liabilities
------------------------------------ ------------- ----------- ---------------
Bank loans and overdrafts 13.2 - 13.2
------------------------------------ ------------- ----------- ---------------
Trade and other payables 1,146.5 - 1,146.5
------------------------------------ ------------- ----------- ---------------
Lease liabilities - 10.0 10.0
------------------------------------ ------------- ----------- ---------------
Current tax payable 5.7 (0.8) 4.9
------------------------------------ ------------- ----------- ---------------
1,165.4 9.2 1,174.6
------------------------------------ ------------- ----------- ---------------
Net current assets 73.8 (9.2) 64.6
------------------------------------ ------------- ----------- ---------------
Non-current liabilities
------------------------------------ ------------- ----------- ---------------
Bank loans 97.5 - 97.5
------------------------------------ ------------- ----------- ---------------
Trade and other payables 25.1 - 25.1
------------------------------------ ------------- ----------- ---------------
Lease liabilities - 100.2 100.2
------------------------------------ ------------- ----------- ---------------
Pension scheme obligations 61.0 - 61.0
------------------------------------ ------------- ----------- ---------------
Deferred tax liabilities 38.8 - 38.8
------------------------------------ ------------- ----------- ---------------
222.4 100.2 322.6
------------------------------------ ------------- ----------- ---------------
Total liabilities 1,387.8 109.4 1,497.2
------------------------------------ ------------- ----------- ---------------
Net assets 415.4 (22.4) 393.0
------------------------------------ ------------- ----------- ---------------
Shareholders' equity
------------------------------------ ------------- ----------- ---------------
Ordinary share capital 19.7 - 19.7
------------------------------------ ------------- ----------- ---------------
Share premium 78.4 - 78.4
------------------------------------ ------------- ----------- ---------------
Capital redemption reserve 14.8 - 14.8
------------------------------------ ------------- ----------- ---------------
Retained earnings 302.5 (22.4) 280.1
------------------------------------ ------------- ----------- ---------------
Total equity 415.4 (22.4) 393.0
------------------------------------ ------------- ----------- ---------------
*The comparatives within the interim period ending 30 June 2018
have been restated to reflect the presentation of the RCF as
non-current rather than current liabilities.
Audited Audited
31 Dec 2018 Impact of 31 Dec 2018
IFRS 16 (restated)
Statement of Financial Position at GBPm GBPm GBPm
31 December 2018
------------------------------------ -------------- ----------- --------------
Non-current assets
------------------------------------ -------------- ----------- --------------
Goodwill 116.2 - 116.2
------------------------------------ -------------- ----------- --------------
Intangible assets 114.6 - 114.6
------------------------------------ -------------- ----------- --------------
Property, plant and equipment 350.9 - 350.9
------------------------------------ -------------- ----------- --------------
Right of use assets - 86.9 86.9
------------------------------------ -------------- ----------- --------------
581.7 86.9 668.6
------------------------------------ -------------- ----------- --------------
Current assets
------------------------------------ -------------- ----------- --------------
Inventories 1,027.7 - 1,027.7
------------------------------------ -------------- ----------- --------------
Trade and other receivables 179.5 - 179.5
------------------------------------ -------------- ----------- --------------
Rental fleet vehicles 54.2 - 54.2
------------------------------------ -------------- ----------- --------------
Cash and cash equivalents 44.4 - 44.4
------------------------------------ -------------- ----------- --------------
Assets held for sale 8.0 - 8.0
------------------------------------ -------------- ----------- --------------
1,313.8 - 1,313.8
------------------------------------ -------------- ----------- --------------
Total assets 1,895.5 86.9 1,982.4
------------------------------------ -------------- ----------- --------------
Current liabilities
------------------------------------ -------------- ----------- --------------
Bank loans and overdrafts 2.6 - 2.6
------------------------------------ -------------- ----------- --------------
Trade and other payables 1,235.7 - 1,235.7
------------------------------------ -------------- ----------- --------------
Lease liabilities - 10.0 10.0
------------------------------------ -------------- ----------- --------------
Current tax liabilities 0.9 (0.8) 0.1
------------------------------------ -------------- ----------- --------------
1,239.2 9.2 1,248.4
------------------------------------ -------------- ----------- --------------
Net current assets 74.6 (9.2) 65.4
------------------------------------ -------------- ----------- --------------
Non-current liabilities
------------------------------------ -------------- ----------- --------------
Bank loans 128.7 - 128.7
------------------------------------ -------------- ----------- --------------
Trade and other payables 19.4 - 19.4
------------------------------------ -------------- ----------- --------------
Lease liabilities - 100.2 100.2
------------------------------------ -------------- ----------- --------------
Pension scheme obligations 68.9 - 68.9
------------------------------------ -------------- ----------- --------------
Deferred tax liabilities 40.0 - 40.0
------------------------------------ -------------- ----------- --------------
257.0 100.2 357.2
------------------------------------ -------------- ----------- --------------
Total liabilities 1,496.2 109.4 1,605.6
------------------------------------ -------------- ----------- --------------
Net assets 399.3 (22.5) 376.8
------------------------------------ -------------- ----------- --------------
Shareholders' equity
------------------------------------ -------------- ----------- --------------
Ordinary share capital 19.4 - 19.4
------------------------------------ -------------- ----------- --------------
Share premium 78.4 - 78.4
------------------------------------ -------------- ----------- --------------
Capital redemption reserve 15.1 - 15.1
------------------------------------ -------------- ----------- --------------
Retained earnings 286.4 (22.5) 263.9
------------------------------------ -------------- ----------- --------------
Total equity 399.3 (22.5) 376.8
------------------------------------ -------------- ----------- --------------
Unaudited Unaudited
Six months Six months
ended 30 ended 30
June Impact of June
2018 IFRS16 2018
(restated*) (restated*)
GBPm
Period to 30 June 2018 Note GBPm GBPm
------------------------------------------- ----- ------------- ------------ -------------
Cash flows from operating activities
------------------------------------------- ----- ------------- ------------ -------------
Profit for the period 38.5 (3.6) 34.9
------------------------------------------- ----- ------------- ------------ -------------
Tax charge 7.2 (0.8) 6.4
------------------------------------------- ----- ------------- ------------ -------------
Depreciation of property, plant and
equipment 10.3 5.0 15.3
------------------------------------------- ----- ------------- ------------ -------------
(Profit)/loss on disposal of property,
plant and equipment (0.2) 4.3 4.1
------------------------------------------- ----- ------------- ------------ -------------
Amortisation of intangible assets 2.7 - 2.7
------------------------------------------- ----- ------------- ------------ -------------
Share based compensation 0.9 - 0.9
------------------------------------------- ----- ------------- ------------ -------------
Interest income - - -
------------------------------------------- ----- ------------- ------------ -------------
Interest payable 9.7 3.0 12.7
------------------------------------------- ----- ------------- ------------ -------------
Debt issue costs 0.2 - 0.2
------------------------------------------- ----- ------------- ------------ -------------
Difference between pension charge
and cash contributions (1.6) - (1.6)
------------------------------------------- ----- ------------- ------------ -------------
Changes in inventories 119.5 - 119.5
------------------------------------------- ----- ------------- ------------ -------------
Changes in receivables (24.8) - (24.8)
------------------------------------------- ----- ------------- ------------ -------------
Changes in payables (107.2) - (107.2)
------------------------------------------- ----- ------------- ------------ -------------
Cash generated from operations 55.2 7.9 63.1
------------------------------------------- ----- ------------- ------------ -------------
Purchase of rental fleet vehicles (52.7) - (52.7)
------------------------------------------- ----- ------------- ------------ -------------
Proceeds from sale of rental fleet
vehicles 52.6 - 52.6
------------------------------------------- ----- ------------- ------------ -------------
Interest paid (9.7) (3.2) (12.9)
------------------------------------------- ----- ------------- ------------ -------------
Interest received - - -
------------------------------------------- ----- ------------- ------------ -------------
Tax paid (0.4) - (0.4)
------------------------------------------- ----- ------------- ------------ -------------
Net cash inflow from operating activities 45.0 4.7 49.7
------------------------------------------- ----- ------------- ------------ -------------
Cash flows from investing activities
------------------------------------------- ----- ------------- ------------ -------------
Purchase of property, plant and equipment (14.0) - (14.0)
------------------------------------------- ----- ------------- ------------ -------------
Purchase of intangibles (4.4) - (4.4)
------------------------------------------- ----- ------------- ------------ -------------
Purchase of subsidiaries net of cash - - -
received
------------------------------------------- ----- ------------- ------------ -------------
Proceeds from disposal of property,
plant and equipment 29.7 - 29.7
------------------------------------------- ----- ------------- ------------ -------------
Net cash inflow from investing activities 11.3 - 11.3
------------------------------------------- ----- ------------- ------------ -------------
Cash flows from financing activities
------------------------------------------- ----- ------------- ------------ -------------
Proceeds from issue of ordinary shares - - -
------------------------------------------- ----- ------------- ------------ -------------
Redemption of ordinary shares (3.2) - (3.2)
------------------------------------------- ----- ------------- ------------ -------------
Repayment of loans 10 (6.1) - (6.1)
------------------------------------------- ----- ------------- ------------ -------------
Draw down on RCF 10 32.0 - 32.0
------------------------------------------- ----- ------------- ------------ -------------
Repayment on RCF 10 (52.0) - (52.0)
------------------------------------------- ----- ------------- ------------ -------------
Repayment of lease liabilities 10 - (4.7) (4.7)
------------------------------------------- ----- ------------- ------------ -------------
Dividends paid (9.8) - (9.8)
------------------------------------------- ----- ------------- ------------ -------------
Net cash (outflow)/inflow from financing
activities (39.1) (4.7) (43.8)
------------------------------------------- ----- ------------- ------------ -------------
Increase in cash and cash equivalents 17.2 - 17.2
------------------------------------------- ----- ------------- ------------ -------------
Cash and cash equivalents at 1 January 38.9 - 38.9
------------------------------------------- ----- ------------- ------------ -------------
Cash and cash equivalents at 30 June 56.1 - 56.1
------------------------------------------- ----- ------------- ------------ -------------
Analysis of cash and cash equivalents
------------------------------------------- ----- ------------- ------------ -------------
Cash and cash equivalents 10 56.2 - 56.2
------------------------------------------- ----- ------------- ------------ -------------
Bank overdraft 10 (0.1) - (0.1)
------------------------------------------- ----- ------------- ------------ -------------
Cash and cash equivalents at 30 June 56.1 - 56.1
------------------------------------------- ----- ------------- ------------ -------------
*The comparatives within the interim period ending 30 June 2018
have been restated to reflect the presentation of the RCF as
non-current rather than current liabilities.
Audited
Audited Impact of 31 Dec 2018
IFRS16
31 Dec 2018 (restated)
GBPm
Year to 31 December 2018 Note GBPm GBPm
-------------------------------------------- ----- -------------- ----------- -------------
Cash flows from operating activities
-------------------------------------------- ----- -------------- ----------- -------------
Profit for the year 43.5 (3.7) 39.8
-------------------------------------------- ----- -------------- ----------- -------------
Tax charge 9.6 (0.8) 8.8
-------------------------------------------- ----- -------------- ----------- -------------
Depreciation of property, plant and
equipment 20.6 10.3 30.9
-------------------------------------------- ----- -------------- ----------- -------------
Profit on disposal of property, plant
and equipment (8.2) 4.4 (3.8)
-------------------------------------------- ----- -------------- ----------- -------------
Amortisation of intangible assets 5.6 - 5.6
-------------------------------------------- ----- -------------- ----------- -------------
Share based compensation 1.7 - 1.7
-------------------------------------------- ----- -------------- ----------- -------------
Interest income (0.3) - (0.3)
-------------------------------------------- ----- -------------- ----------- -------------
Interest payable 18.6 6.1 24.7
-------------------------------------------- ----- -------------- ----------- -------------
Debt issue costs 0.5 - 0.5
-------------------------------------------- ----- -------------- ----------- -------------
Difference between pension charge
and cash contributions (2.1) - (2.1)
-------------------------------------------- ----- -------------- ----------- -------------
Change in inventories 1.4 - 1.4
-------------------------------------------- ----- -------------- ----------- -------------
Changes in receivables 48.9 - 48.9
-------------------------------------------- ----- -------------- ----------- -------------
Changes in payables (60.4) - (60.4)
-------------------------------------------- ----- -------------- ----------- -------------
Cash generated from operations 79.4 16.3 95.7
-------------------------------------------- ----- -------------- ----------- -------------
Purchase of rental fleet vehicles (89.4) - (89.4)
-------------------------------------------- ----- -------------- ----------- -------------
Proceeds from sale of rental fleet
vehicles 90.3 - 90.3
-------------------------------------------- ----- -------------- ----------- -------------
Interest paid (18.6) (6.1) (24.7)
-------------------------------------------- ----- -------------- ----------- -------------
Interest received 0.3 - 0.3
-------------------------------------------- ----- -------------- ----------- -------------
Tax paid (7.1) - (7.1)
-------------------------------------------- ----- -------------- ----------- -------------
Net cash inflow from operating activities 54.9 10.2 65.1
-------------------------------------------- ----- -------------- ----------- -------------
Cash flows from investing activities
-------------------------------------------- ----- -------------- ----------- -------------
Purchase of property, plant and equipment (25.7) - (25.7)
-------------------------------------------- ----- -------------- ----------- -------------
Purchase of intangibles (7.9) - (7.9)
-------------------------------------------- ----- -------------- ----------- -------------
Purchase of subsidiaries net of cash
received (13.7) - (13.7)
-------------------------------------------- ----- -------------- ----------- -------------
Proceeds from disposal of property,
plant and equipment 35.1 - 35.1
-------------------------------------------- ----- -------------- ----------- -------------
Net cash outflow from investing activities (12.2) - (12.2)
-------------------------------------------- ----- -------------- ----------- -------------
Cash flows from financing activities
-------------------------------------------- ----- -------------- ----------- -------------
Proceeds from issue of ordinary shares 0.0 - 0.0
-------------------------------------------- ----- -------------- ----------- -------------
Redemption of ordinary shares (9.3) - (9.3)
-------------------------------------------- ----- -------------- ----------- -------------
Repayment of loans 10 (14.6) - (14.6)
-------------------------------------------- ----- -------------- ----------- -------------
Draw down on RCF 10 135.3 - 135.3
-------------------------------------------- ----- -------------- ----------- -------------
Repayment on RCF 10 (134.1) - (134.1)
-------------------------------------------- ----- -------------- ----------- -------------
Repayment of lease liabilities 10 - (10.2) (10.2)
-------------------------------------------- ----- -------------- ----------- -------------
Dividends paid (15.6) - (15.6)
-------------------------------------------- ----- -------------- ----------- -------------
Net cash outflow from financing activities (38.3) (10.2) (48.5)
-------------------------------------------- ----- -------------- ----------- -------------
Increase in cash and cash equivalents 4.4 - 4.4
-------------------------------------------- ----- -------------- ----------- -------------
Cash and cash equivalents at 1 January 38.9 - 38.9
-------------------------------------------- ----- -------------- ----------- -------------
Cash and cash equivalents at 31 December 43.3 - 43.3
-------------------------------------------- ----- -------------- ----------- -------------
Analysis of cash and cash equivalents
-------------------------------------------- ----- -------------- ----------- -------------
Cash and cash equivalents 10 44.4 - 44.4
-------------------------------------------- ----- -------------- ----------- -------------
Bank overdraft 10 (1.1) - (1.1)
-------------------------------------------- ----- -------------- ----------- -------------
Cash and cash equivalents at 31 December 43.3 - 43.3
-------------------------------------------- ----- -------------- ----------- -------------
2. Segmental reporting
In preparing the interim financial information the Directors
have elected to amend the presentation of the segmental information
to better reflect the Group's revenue streams, gross profit
contributions and the single-segment nature of the business'
operations. The "unallocated" segment that had been reported in
previous interim and annual financial statements has been combined
with the motor division for the period ending 30 June 2019. Given
that this segmental split is equivalent to the Group's Statement of
Total Comprehensive Income, no further presentation has been made.
In addition, the disclosure has been updated to reflect the revenue
contributions from Leasing/other sales which were previously
subsumed within aftersales in the comparative reporting
periods.
Unaudited Unaudited Year ended
six months six months 31 Dec 2018
ended ended
30 June 30 June
2019 2018 GBPm
GBPm GBPm
------------------- ------------- ------------- --------------
New cars 1,288.0 1,311.1 2,394.8
-------------------- ------------- ------------- --------------
Used cars 1,067.5 996.3 1,939.4
-------------------- ------------- ------------- --------------
Aftersales 247.0 228.0 432.7
-------------------- ------------- ------------- --------------
Leasing and other 43.9 41.1 112.6
-------------------- ------------- ------------- --------------
Revenue 2,646.4 2,576.5 4,879.5
-------------------- ------------- ------------- --------------
New cars 84.9 85.0 161.0
-------------------- ------------- ------------- --------------
Used cars 70.9 72.1 135.0
-------------------- ------------- ------------- --------------
Aftersales 109.9 104.9 203.0
-------------------- ------------- ------------- --------------
Leasing and other 8.5 8.5 16.5
-------------------- ------------- ------------- --------------
Gross Profit 274.2 270.5 515.5
-------------------- ------------- ------------- --------------
3. Non-underlying items
The following details items of income and expenditure that the
Group has classified as non-underlying in its statement of total
comprehensive income.
Unaudited Unaudited Year ended
six months six months 31 Dec 2018
ended ended
30 June 30 June
2019 2018 GBPm
GBPm GBPm
-------------------------------------------- ------------- ------------- --------------
Non-underlying items at operating
profit
-------------------------------------------- ------------- ------------- --------------
Property disposals (0.3) 3.3 3.3
--------------------------------------------- ------------- ------------- --------------
Share based compensation (0.8) (0.9) (1.7)
--------------------------------------------- ------------- ------------- --------------
Additional pension past service cost - - (4.7)
--------------------------------------------- ------------- ------------- --------------
Restructure of regulated activities (2.0) - -
-------------------------------------------- ------------- ------------- --------------
(3.1) 2.4 (3.1)
-------------------------------------------- ------------- ------------- --------------
Non-underlying items below operating
profit
-------------------------------------------- ------------- ------------- --------------
Net interest on pension scheme obligations (1.0) (1.2) (1.7)
--------------------------------------------- ------------- ------------- --------------
Debt issue costs (0.2) (0.2) (0.5)
--------------------------------------------- ------------- ------------- --------------
(1.2) (1.4) (2.2)
-------------------------------------------- ------------- ------------- --------------
Non-underlying items at profit before
tax (4.3) 1.0 (5.3)
--------------------------------------------- ------------- ------------- --------------
4. Net interest
Unaudited Unaudited Year ended
six months six months 31 Dec 2018
ended ended
30 June 30 June
2019 2018 GBPm
GBPm GBPm
--------------------------------------------- ------------- ------------- --------------
Interest expenses
--------------------------------------------- ------------- ------------- --------------
Interest payable on bank borrowings (4.5) (3.8) (5.6)
---------------------------------------------- ------------- ------------- --------------
Interest on consignment vehicle liabilities
and stocking loans (6.2) (5.9) (13.0)
---------------------------------------------- ------------- ------------- --------------
Interest on lease liabilities (3.0) (3.0) (6.1)
---------------------------------------------- ------------- ------------- --------------
(13.7) (12.7) (24.7)
--------------------------------------------- ------------- ------------- --------------
Interest income
--------------------------------------------- ------------- ------------- --------------
Bank interest 0.1 - 0.3
---------------------------------------------- ------------- ------------- --------------
Net interest (13.6) (12.7) (24.4)
---------------------------------------------- ------------- ------------- --------------
5. Dividends
Following approval at the Annual General Meeting a final
dividend of GBP10.1m for the year ending 31 December 2018 was paid
in June 2019 and represented a payment of 2.60p per ordinary share
in issue at the time. An interim dividend in respect of the year
ending 31 December 2018 of GBP5.8m, representing a payment of 1.48p
per ordinary share in issue at the time, was paid in November 2018.
An interim dividend of 1.48p per ordinary share is proposed but not
recorded as a financial liability in these interim statements.
6. Earnings per share
Unaudited Unaudited Year ended
six months six months
ended ended
30 June 30 June 31 Dec 2018
2019 2018
(restated)
GBPm GBPm
GBPm
-------------------------------------- ---- ------------- ------------- --------------
Earnings attributable to ordinary
shareholders (GBPm) 20.1 34.9 39.8
-------------------------------------------- ------------- ------------- --------------
Weighted average number of shares
in issue 389,106,631 396,427,270 393,422,446
-------------------------------------------- ------------- ------------- --------------
Basic earnings per share (p) 5.17 8.80 10.12
-------------------------------------------- ------------- ------------- --------------
Dilutive effect of options 13,336,246 15,122,090 17,964,569
-------------------------------------------- ------------- ------------- --------------
Diluted earnings per share (p) 4.99 8.48 9.67
-------------------------------------------- ------------- ------------- --------------
Profit before tax - underlying items
(GBPm) 29.2 40.3 53.9
-------------------------------------------- ------------- ------------- --------------
Effective tax rate 19.3% 15.5% 18.1%
-------------------------------------------- ------------- ------------- --------------
Underlying earnings attributable to
ordinary shareholders (GBPm) 23.6 34.1 44.1
-------------------------------------------- ------------- ------------- --------------
Weighted average number of shares
in issue 389,106,631 396,427,270 393,422,446
-------------------------------------------- ------------- ------------- --------------
Underlying basic earnings per share
(p) 6.06 8.59 11.22
-------------------------------------------- ------------- ------------- --------------
7. Intangible assets
Licences IT
and brands development Total
GBPm GBPm GBPm
------------------------------------ ------------- -------------- --------
Cost
------------------------------------ ------------- -------------- --------
At 1 January 2019 102.6 31.7 134.3
------------------------------------- ------------- -------------- --------
Additions - 1.8 1.8
------------------------------------- ------------- -------------- --------
Transfers - 2.3 2.3
------------------------------------- ------------- -------------- --------
At 30 June 2019 102.6 35.8 138.4
------------------------------------- ------------- -------------- --------
Accumulated amortisation
------------------------------------ ------------- -------------- --------
At 1 January 2019 1.5 18.2 19.7
------------------------------------- ------------- -------------- --------
Charge for the period - 3.3 3.3
------------------------------------- ------------- -------------- --------
At 30 June 2019 1.5 21.5 23.0
------------------------------------- ------------- -------------- --------
Net book value at 30 June 2019 101.1 14.3 115.4
------------------------------------- ------------- -------------- --------
Net book value at 31 December 2018 101.1 13.5 114.6
------------------------------------- ------------- -------------- --------
During the Period GBP2.3m of assets in the course of
construction have been reclassified to intangible assets in the
course of development from other fixed assets.
8. Property, plant and equipment
Freehold Leasehold
property property Other Total
GBPm GBPm GBPm GBPm
-------------------------------- ----------- ------------ -------- --------
Cost
-------------------------------- ----------- ------------ -------- --------
At 1 January 2019 268.2 78.8 96.7 443.7
--------------------------------- ----------- ------------ -------- --------
Additions 1.7 1.5 18.5 21.7
--------------------------------- ----------- ------------ -------- --------
Disposals (0.7) - (2.2) (2.9)
--------------------------------- ----------- ------------ -------- --------
Transfers (1.6) 4.4 (2.3) 0.5
--------------------------------- ----------- ------------ -------- --------
At 30 June 2019 267.6 84.7 110.7 463.0
--------------------------------- ----------- ------------ -------- --------
Accumulated depreciation
-------------------------------- ----------- ------------ -------- --------
At 1 January 2019 18.4 19.3 55.1 92.8
--------------------------------- ----------- ------------ -------- --------
Charge for the period 1.3 1.3 5.4 8.0
--------------------------------- ----------- ------------ -------- --------
Disposals (0.1) - (2.2) (2.3)
--------------------------------- ----------- ------------ -------- --------
At 30 June 2019 19.6 20.6 58.3 98.5
--------------------------------- ----------- ------------ -------- --------
Net book value at 30 June 2019 248.0 64.1 52.4 364.5
--------------------------------- ----------- ------------ -------- --------
Net book value at 31 December
2018 249.8 59.5 41.6 350.9
--------------------------------- ----------- ------------ -------- --------
During the Period GBP2.3m of assets have been reclassified to
intangible assets. A further GBP4.4m has been capitalised as
leasehold property after being transferred from other debtors. In
addition, a further property has been transferred to assets held
for sale.
Assets in the course of construction relate to build costs that
have been incurred but the property is not yet in use. The total of
these assets held at 30 June 2019 is GBP13.3m. These assets will be
transferred to Freehold property when complete.
9. Assets held for sale
Total
GBPm
------------------- --------
Net book value
------------------- --------
At 1 January 2019 8.0
----------------------- --------
Additions 1.6
----------------------- --------
Transfers (3.1)
----------------------- --------
At 30 June 2019 6.5
----------------------- --------
During the Period the Group has disposed of one of the
properties classified as held for sale at 31 December 2018.
During the Period the total net book value of disposals from
property, plant and equipment and from assets held for sale was
GBP3.7m. Total proceeds received was GBP3.4m resulting in a loss on
property disposals of GBP0.3m.
10. Debt analysis
At 1 Jan Net RCF Loan repayment Lease Non cash At 30
2019 movement repayment movement June 2019
GBPm
GBPm GBPm GBPm GBPm GBPm
----------------------------- ----------- ----------- ----------------- ------------ ----------- ------------
Period to 30 June 2019
----------------------------- ----------- ----------- ----------------- ------------ ----------- ------------
Other loans 11.5 - (0.5) - - 11.0
----------------------------- ----------- ----------- ----------------- ------------ ----------- ------------
RCF 118.7 27.0 - - - 145.7
----------------------------- ----------- ----------- ----------------- ------------ ----------- ------------
Lease liabilities 110.2 - - (6.0) 0.9 105.1
----------------------------- ----------- ----------- ----------------- ------------ ----------- ------------
240.4 27.0 (0.5) (6.0) 0.9 261.8
----------------------------- ----------- ----------- ----------------- ------------ ----------- ------------
Excluding lease liabilities 130.2 27.0 (0.5) - - 156.7
----------------------------- ----------- ----------- ----------------- ------------ ----------- ------------
Cash and cash equivalents (44.4) (93.6)
----------------------------- ----------- ----------- ----------------- ------------ ----------- ------------
Bank overdraft 1.1 10.8
----------------------------- ----------- ----------- ----------------- ------------ ----------- ------------
Net debt 86.9 73.9
----------------------------- ----------- ----------- ----------------- ------------ ----------- ------------
At 1 Jan Net RCF Loan repayment Lease Non cash At 30
2018 movement repayment movement June 2018
GBPm
GBPm GBPm GBPm GBPm GBPm
---------------------- ----------- ----------- ----------------- ---------------------- ----------- ------------
Period to 30 June
2018
---------------------- ----------- ----------- ----------------- ---------------------- ----------- ------------
Term loan 75.0 - (5.0) - - 70.0
---------------------- ----------- ----------- ----------------- ---------------------- ----------- ------------
Other loans 15.2 - (1.1) - - 14.1
---------------------- ----------- ----------- ----------------- ---------------------- ----------- ------------
RCF 46.5 (20.0) - - - 26.5
---------------------- ----------- ----------- ----------------- ---------------------- ----------- ------------
Lease liabilities 89.2 - - (4.7) 25.6 110.1
---------------------- ----------- ----------- ----------------- ---------------------- ----------- ------------
225.9 (20.0) (6.1) (4.7) 25.6 220.7
---------------------- ----------- ----------- ----------------- ---------------------- ----------- ------------
Excluding lease
liabilities 136.7 (20.0) (6.1) - - 110.6
---------------------- ----------- ----------- ----------------- ---------------------- ----------- ------------
Cash and cash
equivalents (45.3) (56.2)
---------------------- ----------- ----------- ----------------- ---------------------- ----------- ------------
Bank overdraft 6.4 0.1
---------------------- ----------- ----------- ----------------- ---------------------- ----------- ------------
Net debt 97.8 54.5
---------------------- ----------- ----------- ----------------- ---------------------- ----------- ------------
At 1 Jan Net RCF Debt on Loan repayment Lease Non cash At 31
2018 movement acquisition repayment movement Dec 2018
GBPm
GBPm GBPm GBPm GBPm GBPm GBPm
----------------- ----------- ----------- -------------- ----------------- ------------ ----------- -----------
Year to 31
December
2018
----------------- ----------- ----------- -------------- ----------------- ------------ ----------- -----------
Term loan 75.0 - - (5.0) - (70.0) -
----------------- ----------- ----------- -------------- ----------------- ------------ ----------- -----------
Other loans 15.2 - 5.9 (9.6) - - 11.5
----------------- ----------- ----------- -------------- ----------------- ------------ ----------- -----------
RCF 46.5 1.2 - - - 71.0 118.7
----------------- ----------- ----------- -------------- ----------------- ------------ ----------- -----------
Lease
liabilities 89.2 - - - (10.2) 31.2 110.2
----------------- ----------- ----------- -------------- ----------------- ------------ ----------- -----------
225.9 1.2 5.9 (14.6) (10.2) 32.2 240.4
----------------- ----------- ----------- -------------- ----------------- ------------ ----------- -----------
Excluding lease
liabilities 136.7 1.2 5.9 (14.6) - 1.0 130.2
----------------- ----------- ----------- -------------- ----------------- ------------ ----------- -----------
Cash and cash
equivalents (45.3) (44.4)
----------------- ----------- ----------- -------------- ----------------- ------------ ----------- -----------
Bank overdraft 6.4 1.1
----------------- ----------- ----------- -------------- ----------------- ------------ ----------- -----------
Net debt 97.8 86.9
----------------- ----------- ----------- -------------- ----------------- ------------ ----------- -----------
11. Share capital
Number of Total
shares GBPm
------------------------------------ ------------ --------
Authorised
------------------------------------ ------------ --------
Ordinary shares of 5p each 480,000,000 24.0
------------------------------------ ------------ --------
Alloted, called up and fully paid
------------------------------------ ------------ --------
At 1 January 2019 388,973,634 19.4
------------------------------------ ------------ --------
Alloted under share option schemes 284,345 -
------------------------------------ ------------ --------
At 30 June 2019 389,257,979 19.4
------------------------------------ ------------ --------
12. Contingent liabilities
As previously announced, during 2018 the Board became aware of
certain matters requiring review in relation to the Group's
regulated activities. In December 2018, the Board commissioned an
independent review of the Group's internal control, risk assurance
systems and internal audit. This review, which we shared with the
FCA, indicated that there were some control issues in the sales
process in the Group's regulated activities which would require an
improvement plan to be implemented.
The Group has now finalised its improvement and remedial action
plan and has made a one-off provision of GBP2.0m as at 30 June
2019. The total investment required in 2019 and 2020 is
approximately GBP10.0m. However, to be in accordance with IAS 37 -
Provisions, Contingent Liabilities and Contingent Assets, only
GBP2.0m of the investment has been provided for.
As announced on 25 June 2019, the Group has been informed by the
FCA that it intends to carry out an investigation into sales
processes between the period of 1 January 2016 to 13 June 2019.
This investigation has not yet started. With the full support of
the Group, the FCA will reach its conclusions in due course. At
this stage the Board cannot estimate what effect, if any, the
outcome of this investigation may have.
13. Subsequent events
In August 2019 the Group has finalised the sale of a property in
Dublin. The sale proceeds have been agreed at EUR6.6m and the Group
will record a non-underlying gain on disposal of up to EUR4.8m. Due
to the size of the transaction, approval from the Irish Revenue
Commissioners is required before completion. However, this is
expected to be finalised within the short term. The related
property has therefore been reclassified from property, plant and
equipment to assets held for sale as at 30 June 2019.
14. Interim statement
Copies of this report and the last Annual Report and Accounts
are available from the Company Secretary at the registered office
of the company at Lookers House, 3 Etchells Road, West Timperley,
Altrincham, WA14 5XS and can be viewed via the Group's website at
www.lookersplc.com. Copies of this report have also been submitted
to the UK Listing Authority and will shortly be available at the UK
Listing Authority's Document Viewing Facility at 25 North
Colonnade, Canary Wharf, London E14 5HS (Telephone +44 (0) 207 066
1000).
Responsibility statement
We confirm that to the best of our knowledge
(a) The interim financial statements have been prepared in
accordance with IAS 34 'Interim Financial Reporting';
(b) The interim financial statements include a fair review of
the information required by DTR 4.2.7R (identification of important
events during the first six months and their impact on the
condensed set of financial statements and description of principal
risks and uncertainties for the remaining six months of the year);
and
(c) The interim financial statements include a fair review of
the information required by DTR 4.2.8R (disclosure of related
parties' transactions and charges therein).
Cautionary statement
This Interim Report has been prepared solely to provide
additional information to shareholders to assess the Group's
strategies and the potential for those strategies to succeed. The
Interim Report should not be relied on by any party or for any
other purpose.
The Interim Report contains certain forward-looking statements.
These statements are made by the Directors in good faith based on
the information available to them up to the time of their approval
of this report and such statements should be treated with caution
due to the inherent uncertainties, including both economic and
business risk factors, underlying any such forward-looking
information.
By order of the Board
Andy Bruce Mark Raban
Chief Executive Officer Chief Financial Officer
13 August 2019 13 August 2019
Glossary of terms
Introduction
In the reporting of financial information, the Directors have
adopted various Alternative Performance Measures (APMs) of
financial performance, position or cash flows other than those
defined or specified under International Financial Reporting
Standards (IFRS). These measures are not defined by IFRS and
therefore may not be directly comparable with other companies'
APMs, including those in the Group's industry. APMs should be
considered in addition to IFRS measures and are not intended to be
a substitute for IFRS measurements.
Purpose
The Directors believe that these APMs provide additional useful
information on the underlying performance and position of the
Group. APMs are also used to enhance the comparability of
information between reporting periods by adjusting for
non-recurring or uncontrollable factors which affect IFRS measures,
to aid the user in understanding the Group's performance.
Consequently, APMs are used by the Directors and management for
performance analysis, planning, reporting and incentive-setting
purposes.
The key APMs that the Group has focused on this period are as
follows:
Like-for-like sales (LFL): These are calculated on the basis
that dealerships have contributed six months of revenue and profit
contribution in both the current and comparative periods
presented.
Gross profit margin: Gross profit as a percentage of
revenue.
Non-underlying items: Relate to costs or incomes which are
excluded from the Group's underlying profit measures due to their
size and nature in order to reflect management's view of the
underlying performance of the Group.
Underlying operating profit: Operating profit before the impact
of non-underlying items as defined above.
Underlying profit before tax: Profit before tax before the
impact of non-underlying items as defined above.
Underlying earnings per share (non-dilutive): Earnings per share
before the impact of non-underlying items as defined above.
Underlying EBITDA: Operating profit excluding depreciation and
amortisation before the impact of non-underlying items as defined
above.
Net debt: Bank loans and overdrafts less cash and cash
equivalents. Lease liabilities and stocking loans are not included
in net debt.
Underlying return on capital: Profit before tax before the
impact of non-underlying items as defined above, as a percentage of
overall capital employed.
New car unit sale: A new vehicle sale which has generated
revenue for the Group.
Used car unit sale: Any vehicle sold that isn't a new car unit
sale.
Car parc: The approximate number of vehicles on the UK road
network.
New car market size: Total number of annual new vehicle unit
registrations made in the UK as defined by the Society of Motor
Manufacturers and Traders ("SMMT").
New car market share: The Group's annual share of the new car
market calculated as a percentage of the Group's new car unit sales
of the new car market size.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR GGUQWRUPBGQW
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