Strong start to 2016 for Lookers 17 | 05 | 2016
CAR GIANT LOOKERS, which owns Scottish dealership groups Taggarts and Lomond Audi, has reported “strong performance with continued improvements in all areas of the business” for the opening quarter of 2016.
According to the Manchester-based company, this strong start is expected to help generate a “significant increase” over its 2015 performance for year-end.
In a statement to the City the company, led by Scots chief executive Andy Bruce Pictured), said: “The group has made a good start to the year with positive results for the first quarter from both the motor and parts divisions.
“The balance sheet continues to be strengthened by strong operational cash flow and we have substantial headroom in our bank facilities. This provides financial security as well as funding capacity to help develop the business through further strategic acquisitions in both the motor and parts divisions.”
Total gross profit from new cars increased by 23%, or 5% on a like-for-like basis, while margins for both new retail and fleet cars were maintained at a similar level to last year.
Related: Lookers pre-tax profits up 6% to £62.8m
“Our used car volumes continue to increase in part due to higher volumes of leads generated by the group’s website, which have increased further compared to last year. The website has recently been significantly upgraded and will benefit from further major developments later this year,” the group’s statement said.
Gross profit in the aftersales business also saw increases. Up by 25%, or 7% on a like-for-like basis.
“The increase in volumes and margins continues to benefit from initiatives made in recent years to develop the aftersales business including further increases in the penetration of the sale of service plans,” the statement continued.
“We also continue to invest in new technology and systems to provide enhanced levels of customer experience to further strengthen the aftersales business.”
Progress was also reported in the parts division in both turnover and gross profit, and this was against a background of an improving but competitive market.
Cash flow continues to be strong during the period and was significantly higher at both the operational and net cash flow levels compared to budget.
The group said it generated £18.1m from the sale of its Volkswagen dealership in Battersea which will go towards reducing its borrowings.
“This provides financial security as well as funding capacity to help develop the business through further strategic acquisitions in both the motor and parts divisions.”
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Jim McGill