Lookers

LN: LOOK

£191.3m market cap

49.15p 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 issued a trading update indicating the performance of its new vehicle activities deteriorated as the important September selling month progressed. As a result, Q319 new car gross profit fell by £7m compared to the prior year. In addition, it has accelerated its site consolidation and closure plan to improve operational performance and will take a charge of £8m in H219. Despite robust performances by the higher-margin used car and aftersales segments, management cut its FY19 underlying PBT guidance by 50% to £20m. The CEO and COO are both stepping down with immediate effect. The interim executive team and full-time replacements need to focus on restoring internal and external confidence, as well as driving recovery in still-challenging markets.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2017A 4696.3 103.7 62.1 12.61 3.9 3.0
2018A 4879.5 113.1 50.0 9.95 4.9 2.1
2019E 4890.8 79.9 15.7 3.08 16.0 3.7
2020E 5006.7 82.2 16.4 3.22 15.3 2.5
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 14/11/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 104.8
Forecast gearing ratio (%) 29
Price performance
%
1m
3m
12m
Actual (11.0) 6.9 (49.7)
Relative* (12.0) 3.8 (51.7)
52-week high/low 108.0p/41.6p
*% relative to local index
Key management
Phil White Chairman
Andy Bruce CEO
Mark Raban CFO