seen its results for the six months to June 30 2008 hit by the
“turbulent macroeconomic climate”, said chief executive Ken
Surgenor, with adjusted pre-tax profits down 14 per cent to £15.5m
(H1 2007: £18.1m).
Revenues for the period were up significantly on 2007,
boosted by the acquisition of the outlets of the Dutton Forshaw, to
£1.04bn (H1 2007: £879m).
Surgenor added that he was “pleased” with the retail group’s
performance in difficult conditions for car sales, both new and
used. “Our diversified business model gives us the flexibility to
adapt to the current uncertainties within the UK and global
economies and our used car supermarkets and independent parts
businesses are showing significant year on year progress,” he
said.
New car sales were down 6.5 per cent on a like-for-like basis, in a
market where overall new car sales were down only 1.6 per cent,
according to figures from the SMMT. Lookers said the sharper fall
it had experienced was down to the poor performance of its volume
brands, with Renault, Citroën, Peugeot and Toyota down 14.9 per
cent, 11.8 per cent, 9.4 per cent and 7.5 per cent
respectively.
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In the prestige sector, meanwhile, Lexus sales fell by 20.1 per
cent and Land Rover sales were down 11.3 per cent.
Lookers, which operates 31 franchises across 139 outlets, said its
used car supermarkets had offered a bright spot amid the gloom,
with trading at these sites returning to profit following
structural management changes; their performances were said to be
“improving”.
“The board anticipates the full year results to be in line
with the lower end of market expectations,” Surgenor said.
F&I strategy
Surgenor told Motor Finance that Lookers saw a “downturn in the
first-time acceptance rate” for point-of-sale (PoS) finance and
insurance (F&I) applicants over H1, due to tightened lending
criteria on the part of banks and independent finance houses.
“We always look to promote F&I, through our group F&I
director and his team of regional F&I managers.”
Finance director David Dyson added: “The recent fines handed
out by the FSA to motor retailers [in relation to payment
protection insurance selling – see p5] have made us more cautious,
but we think our systems are robust and we are selling in an
appropriate way.
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By GlobalData “In terms of F&I profitability and penetration we haven’t
seen a lot of change [over H1], but due to the credit squeeze it’s
a bit more difficult to get the job done.”
Dyson noted that the main difference between dealerships with
strong and weak F&I performances is caused by “focus”: “All our
dealers have the same F&I background and training, and the same
toolkit available to them, so in terms of improving our average
F&I performance, we want to get that focus on F&I spread
across the entire group.”
