Market Cap£310m

Last Close 78.9p

Lookers is one of the largest UK motor vehicle retailers, with its new car operations supported by the strength of used and aftersales activities. It now operates 153 franchises, representing 33 marques from 100 sites around the UK and Ireland.

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Investment summary

Lookers is the second largest UK new car retailer. Despite significant pandemic and new vehicle supply disruption, a focus on cost control and working capital optimisation contributed to a record FY21 performance. Notwithstanding supply constraints, strong momentum has continued in H122. Inflationary cost pressures are a challenge and could dampen demand into FY23. Investment to optimise operational performance and address long-term market trends is increasing, supported by the healthy balance sheet. Adjusted net cash (ex leases) at 31 May was £62.4m (FY21 £3.0m). Lookers now anticipates FY22 underlying PBT of around £45m ahead of its prior expectations; our FY22 estimates reflect that.

Y/E Dec
Revenue (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2020A 3699.9 95.0 13.7 2.97 26.2 4.4
2021A 4050.7 165.1 90.1 19.95 3.9 2.7
2022E 4124.6 136.1 62.0 12.74 6.1 3.6
2023E 4370.0 137.8 60.0 12.03 6.5 3.4
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. However, the sector is normally rated for recessions and economic shocks like these and has survived two dramatic crises in 2008/09 and 2020/21.

Last updated on 12/08/2022
Content on Lookers
Lookers – Smoothing out the bumps
Industrials | research Update | 30 June 2022
Lookers – Record FY21, but challenges remain
Industrials | research Update | 11 April 2022
Lookers – Normal service has been resumed
Industrials | research Update | 10 January 2022
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Share price graph
Balance sheet
Forecast net cash (£m) 37.7
Forecast gearing ratio (%) N/A
Price performance
Actual 1.6 6.9 11.2
Relative* (3.1) 3.1 10.1
52-week high/low 101.0p/56.4p
*% relative to local index
Key management
Ian Bull Chairman
Mark Raban CEO
Oliver Laird CFO