TIDMLOOK
RNS Number : 2686C
Lookers PLC
16 October 2020
16 October 2020
Lookers plc ("Lookers" or the "Group")
Q3 TRADING AND OPERATIONAL UPDATE
Lookers plc, one of the leading UK motor retail and aftersales
service groups, provides the following trading and operational
update for the three-month period ended 30 September 2020 ("Q3" or
the "Period").
Summary
During the Period the Group's dealerships in England, Northern
Ireland and Scotland were fully operational following the end of
lockdown.
The Group's trading in Q3 was better than we expected. This was
underpinned by our significant outperformance of the UK retail new
car market, robust like-for-like growth in both used car sales and
aftersales revenues. It also reflected the strengthening of used
car margins and the cost saving and other benefits of our
restructuring programme.
On a like-for-like basis, the Group sold over 42,000 new retail
and used cars, 13.6% higher than the same period last year. This
growth was fuelled by the release of pent up demand from over two
months of closure and the ongoing trend of private car use instead
of public transport. We have also had a good customer response to
our improved, simplified and more digitised sales process, which
has helped boost our performance.
New Vehicles
SMMT UK market figures for new car registrations to retail and
fleet customers were broadly flat in Q3, retail up 4.1% and fleet
down 4.3%. The Group outperformed the UK retail market with
like-for-like unit sales up by 27.1% on last year. In the key
registration plate change month of September, the Group performed
particularly well, albeit against a prior year comparative that was
impacted by new vehicle supply restrictions in certain brands.
The Group has repositioned its fleet business withdrawing from
certain uneconomic activities to focus on business which maximises
margin retention and working capital efficiency. On a like-for-like
basis the Group invoiced and delivered approximately 12,000 fleet
units which was 12.6% below last year.
Used Vehicles
In Q3 like-for-like used unit sales were 6.2% above last year.
In addition to volume growth, robust residual values have supported
significant margin growth. Activity in older, lower value vehicles
has been encouraging, driven by ongoing consumer aversion to public
transport as the Covid-19 pandemic continues. Despite these
results, the Group remains cautious in managing its used inventory
position moving forward.
Aftersales
In Q3 like-for-like service revenue was 7.4% above last year. In
addition to revenue growth, our service proposition achieved higher
margins.
Financial position
The Group remains focused on driving cash flow through enhanced
working capital management, portfolio management, cost reduction
and the selective disposal of surplus property.
Like-for-like retail operating costs in the Period were
approximately 16% below last year. Excluding the impact of the
Government's Job Retention Scheme and business rates holiday
scheme, retail operating costs were approximately 9% below last
year as a result of the continued focus on all discretionary cost
items.
As at 30 September 2020 net debt was approximately GBP22.5m
(2018: cGBP132.6m), substantially lower than last year.
The Group currently holds freehold property for disposal with a
net book value of circa GBP30m. Approximately GBP12m from these
disposals is expected to be received before 31 December 2020.
Financial Statements
We are continuing to work with our auditors to finalise the
accounts for the year ended 31 December 2019 (the "2019 Results")
and the interim results for the 6 months ended 30 June 2020 (the
"Interim Results"). We currently expect both the 2019 Results and
the Interim Results to be published in November 2020.
As 31 October 2020 is the last date permitted for the
publication of the Interim Results under the Financial Conduct
Authority's (the "FCA") Disclosure Guidance and Transparency Rules
(as modified by the temporary relief granted to all listed
companies by the FCA on 27 May 2020), the Company does not now
expect to submit a request to the FCA to restore the listing of the
Company's shares until shortly before publication of the Interim
Results.
Outlook
The temporary closure of the Group's dealerships throughout the
lockdown period had a significant impact on financial performance
during H1. As a consequence, the Group expects to report a material
underlying PBT loss in H1.
Trading in Q3 resulted in underlying PBT significantly ahead of
last year, largely offsetting the loss recorded in H1.
Q4 will benefit from the full impact of the Group's
restructuring activity, however the Board remains mindful of the
ongoing uncertainty regarding Covid-19 and the possible impact on
the UK car market.
Mark Raban, Chief Executive Officer, said:
"Our decisive self-help measures, combined with better than
expected trading in Q3 and strong support from our brand partners,
have helped the Group emerge from lockdown in a strong position.
Naturally, we remain cautious around the future outlook given the
ongoing Covid-19 backdrop but we are well positioned to deal with
any emerging challenges. I would like to thank all my colleagues
for their amazing and continued support and dedication."
This announcement contains inside information for the purposes
of article 7 of the Market Abuse Regulation (EU) No 596/2014. The
person responsible for making this announcement is the Company
Secretary.
For further information:
Mark Raban, Chief Executive Officer Tel: 0161 291 0043
MHP Communications
Charles Hirst, Alistair de Kare-Silver Tel: 07595 461 231
Email: Lookers@mhpc.com
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END
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