Lookers

LN: LOOK

£358m market cap

92p 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 reports FY18 results on 13 March having maintained its outlook notwithstanding supply-side disruption that created volatility in new car markets in H218. Used car and aftersales activities are expected to have remained healthy. There are signs of stabilisation in new car markets with January 2019 private registrations up 2.9% although fleet and business sales remained weaker. Despite the challenges for FY19, 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 7.0 2.8
2017A 4696.3 105.4 68.4 14.14 6.5 5.5
2018E 4835.4 105.2 67.7 13.70 6.7 3.0
2019E 4824.2 103.3 66.4 13.65 6.7 3.5
Last updated on 22/03/2019
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 22/03/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 66.7
Forecast gearing ratio (%) 17
Price performance
%
1m
3m
12m
Actual (12.4) 4.6 4.4
Relative* (12.5) (2.7) 1.9
52-week high/low 112.2p/87.2p
*% relative to local index
Key management
Phil White Chairman
Andy Bruce CEO
Robin Gregson FD