Lookers

LN: LOOK

£204.4m market cap

52.5p 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 is the second largest UK new car retailer. FY19 outlook has deteriorated as used car markets progressively softened in Q219 exacerbating inflationary pressures that added £11m to H119 employment costs generating significantly lower FY19 estimates. In addition, Lookers is to be the subject of an FCA investigation of the company’s regulated activities sales processes from 1 January 2016 to 13 June 2019. Markets remain challenging but expectations and estimates now appear reset after H119 results.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2017A 4696.3 99.2 68.4 14.14 3.7 3.2
2018A 4879.5 99.9 67.3 14.03 3.7 2.6
2019E 4882.1 79.7 40.8 8.22 6.4 2.9
2020E 5038.7 82.9 42.7 8.60 6.1 2.5
Last updated on 16/09/2019
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 new car supply disruption. Lookers is pursuing its strategy of focusing on the right brands in the right locations supported by appropriate levels of investment.

Last updated on 16/09/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 90.8
Forecast gearing ratio (%) 22
Price performance
%
1m
3m
12m
Actual 8.7 (29.7) (52.5)
Relative* 5.1 (30.0) (52.4)
52-week high/low 110.8p/41.6p
*% relative to local index
Key management
Phil White Chairman
Andy Bruce CEO
Robin Gregson FD