Lookers plc confident of further grown this year

At yesterday's AGM of the UK¡¯s fifth largest motor retail group Lookers plc, chairman Phil White said: ¡°Whilst the trading environment for new cars is as challenging as expected, we continue to make progress given our diversified business model and with the positive impact of the Dutton Forshaw acquisition and the return of our used car supermarket business to profitability.¡±
 
Lookers¡¯ total new car sales were down 5% on a like for like basis in the first quarter, with an 8% drop in the Northern Ireland market, but while the Northern Ireland used car market was similarly afflicted, the group¡¯s total used retail sales on a like for like basis were only 1% behind last year. The impact of the recently acquired Dutton Forshaw franchises and aftersales business offset the more challenging market conditions in Northern Ireland to a large extent.
 
Lookers made operational changes to its two used car supermarket outlets last year, and as a result, the business is now reported to be trading profitably from a lower working capital base. This business, together with Lookers¡¯ franchised aftersales business, represented 54% of the group's gross profit in 2007. Lookers is in the process of relocating the Liverpool, Bristol and Glasgow branches of the trade parts distributor FPS to larger sites by the end of the year. A new Lucas contract to distribute lighting and mirror products throughout the UK is now operational across the FPS business.
 
Earlier this month, Lookers completed the acquisition of of Bramall and Jones VW Limited for about £1.75 million in cash and the assumption of debt of approximately £2 million.
 
While Lookers¡¯ board is cautious about organic growth in new car sales this year, it believes the acquisitions of the Dutton-Forshaw group from Lloyds TSB in the last quarter of 2007 and more recently the Bramall and Jones businesses, will provide growth in 2008.
From: auto industry/news

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