Lookers

LN: LOOK

£407.8m market cap

104.8p last close

Lookers is vying to be the largest UK motor vehicle retailer, with its new car operations supported by the strength of used and aftersales activities. It operates 155 franchises, representing 32 marques from 100 sites around the UK.

Investment summary

Lookers has maintained its outlook for the current year, notwithstanding supply-side disruption that created volatility in new car markets in Q318. Used car and aftersales activities remain healthy and Q318 trading was ahead against a strong Q317. There are signs of stabilisation in new car markets in Q418 and Lookers expects to deliver against market expectations for the full year. Despite lower FY19 expectations, the undemanding rating remains supported by a healthy yield.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2016A 4088.2 97.6 64.9 13.13 8.0 3.2
2017A 4696.3 105.4 68.4 14.14 7.4 6.3
2018E 4835.4 105.2 67.7 13.70 7.6 3.4
2019E 4824.2 103.3 66.4 13.65 7.7 3.9
Last updated on 18/02/2019
Industry outlook

Market dynamics favour larger motor dealership groups against smaller independent groups, which still command c 60% of the franchise market. Global manufacturing overcapacity still points to OEM support, although market and buyer confidence is undermined by Brexit concerns, negative sentiment on diesel and PCP finance and potential H218 new car supply disruption rates. Lookers management is pursuing its strategy of focusing on the right brands in the right locations supported by appropriate levels of investment.

Last updated on 18/02/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 66.7
Forecast gearing ratio (%) 17
Price performance
%
1m
3m
12m
Actual 2.1 12.1 16.6
Relative* (1.1) 9.0 18.4
52-week high/low 112.2p/87.2p
*% relative to local index
Key management
Phil White Chairman
Andy Bruce CEO
Robin Gregson FD