Lookers highlights 'positive' first quarter; profit up in all divisions

Car dealership and aftersales services chain Lookers hailed a "positive trading performance" for the first quarter, ahead of the previous year and with a strong result in March.

The company reported a 17% jump in gross profit on new cars, or 9% on a like-for-like basis. The overall UK new car market volume was up 6.2%, while total Lookers new car volumes were 7.4% higher.

Lookers attributed some of the improvement in the new car market to the increase in Vehicle Excise Duty from 1 April 2017, which will likely brought forward sales from April to March, something which appears to be confirmed by the April new car registrations. However, the group added that it is not possible to estimate the impact of this on volumes until it has seen the full effect in the second quarter.

Retail sales volumes were up 9.2% on a LFL basis and fleet sales increased 5.1%. The used car business saw a 23% rise in gross profits, or 17% on a LFL basis, with higher volumes of leads generated by the website. In Aftersales, gross profit was up 18% or 9% on a LFL basis, with turnover 17% higher or 8% LFL.

"The group has made a pleasing start to the year with a positive result for the first quarter. We have a strong balance sheet where the level of net debt to EBITDA has improved compared to the prior year and which continues to be strengthened by operational cash flow. We also have substantial headroom in our bank facilities which provides financial security as well as significant additional funding capacity to help develop the business through further strategic acquisitions.

"The financial performance of the group in the three month period builds on what was already a strong comparative in the previous year. On the basis of the first quarter we continue to believe that the results for the year ending 31 December 2017 should be in line with management's current expectations."

At 1020 BST, the shares were up 0.6% to 122.68p.