Lookers

LN: LOOK

Market Cap£282m

Last Close 72p

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. Underlying PBT was £90.1m on sales of £4.05bn. FY21 adjusted net cash (ex leases) was £3.0m (FY20 net debt £40.7m). Despite supply constraints, strong momentum continued in Q122, although we expect gross margins to moderate as FY22 progresses and used car prices stabilise. Management is reviving investment to optimise operational performance and address long-term market trends. The £28m sale and leaseback of a dealership site in Battersea is an example of the proactive management of its substantial property assets.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2020A 3699.9 95.0 13.7 2.97 24.2 4.1
2021A 4050.7 165.1 90.1 19.95 3.6 2.5
2022E 4231.0 128.3 53.0 10.88 6.6 3.6
2023E 4370.0 137.8 60.0 12.03 6.0 3.2
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 26/05/2022
Content on Lookers
Lookers – Record FY21, but challenges remain
Industrials | research Update | 11 April 2022
Lookers – Normal service has been resumed
Industrials | research Update | 10 January 2022
Lookers – Strong performance continued through Q321
Industrials | research Update | 26 October 2021
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Andy Chambers

Director
Sector
Industrials
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Share price graph
Balance sheet
Forecast net cash (£m) 32.4
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (9.3) (20.4) 4.4
Relative* (10.2) (20.1) 0.9
52-week high/low 101.0p/56.4p
*% relative to local index
Key management
Ian Bull Chairman
Mark Raban CEO
Oliver Laird CFO
Company website

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