Scots sales 'unbelievable' for Lookers 08 | 03 | 2018

LOOKERS, WHICH OWNS Scots dealership groups Taggarts and Lomond Audi, has reported a 14.9% increase in turnover and 2.7% increase in operating profits for the period to December 31, 2017. The adjusted profit before tax rose by by 5.4% to £68.4million, up from £64.9m. This figure excludes the £28 million realised by the sale of its parts division to Alliance Automotive in late 2016.

And chief executive, Scot Andy Bruce (pictured), highlighted it’s been “an unbelievable year in Scotland”. The Scottish operation, which employs around 800 people in Scotland, generates around 10% of the group’s business.

The past 12 months have seen Taggarts invest in opening new state-of-the-art Jaguar and Volvo dealerships at Hillington Park by the M8 motorway. In addition, Bruce confirmed the Glasgow Audi showroom at Braehead is the most profitable in Lookers’ 155-strong network of dealerships across the UK and Ireland.

In September, Lookers also opened its first ‘Lookers Outlet’ multi-franchise used car outlet in Scotland, in Motherwell.

“It’s incredible the footfall that’s going through our Scottish dealerships,” he said. “It certainly shows the importance of having the right locations. Scotland is a very important market for Lookers.”

Lookers saw its new car sales volumes in 2017 — which represented 33% of the group’s gross profit — fall by 4.4% in retail but increased by 1.4% in fleet. Its total new car turnover (£2.48bn) increased by 12% year-on-year and increased by 3% on a like-for-like basis. Significantly, gross profit from new cars increased by 2.2% year-on-year and by 2.6% on a like-for-like basis.

The fleet sector played an increasingly important role through 2017 for Lookers as the group strengthened its focus on the sector. Fleet turnover, including commercial vehicles, increased by 17.6% or 5.6% on a like-for-like basis.

In used cars — which accounts for 22% of total gross profit — Lookers believes there are further grounds for growth, with increased traffic and leads being generated by its website. The group witnessed increased used car sales volumes by 15% in 2017, compared with a 1% fall in the overall UK market.

Lookers also said turnover of used cars (£1.7bn) increased by 19%, or 13% on a like-for-like basis, compared to 2016, as gross profit increased by 27%, or 15% like-for-like

There was also a growth in aftersales turnover and profits, which the group put down to an increased emphasis on performance and specific targets, allied to higher numbers of customers choosing to enter into service contracts.

Aftersales is responsible for 41% of the group’s profits, and the turnover figure of £516m showed an increase of 16% compared to 2016. Gross profit increased by 14%, or 3% on a like-for-like basis, meanwhile, with the margin also at a similar level compared to last year.

Lookers Scots boss also highlighted the role played by Brexit in the group’s financial result, and admitted the new car market would have been considerably larger without the fall out from the Brexit vote.

That dent to customer confidence, allied to the resulting fall in the pound which has made overseas-based car manufacturers based less keen to promote sales in the UK, have combined to make car sales less profitable for the car makers.

Despite that, Bruce expects Lookers to make further progress over 2018 with good momentum in used cars and aftersales. and a resilient performance in new cars

“We continue to make significant investments to upgrade our facilities and enhance our multi-channel customer experience,” Bruce said.

“We believe this gives us a competitive advantage to strengthen our position as a leading UK automotive retail and aftersales service group which leaves us very well positioned for future growth over the medium to long term.”

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Jim McGill

Scots sales 'unbelievable' for Lookers 08 | 03 | 2018

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