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Lookers lifts expectations again, shares rally

Stock MarketsOct 06, 2021 09:50
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© Reuters

By Samuel Indyk

Investing.com – Lookers (LON:LOOK) shares are trading higher on Wednesday morning after the UK car dealership chain lifted its guidance following a strong third quarter.  

The company said trading in Q3 remained strong and above expectations, driven by new vehicle market outperformance, excellent new and used vehicle margins and continued tight cost and working capital control.

However, Lookers cautioned that the semi-conductor shortage has continued to pressure the supply and availability of new vehicles in Q3, with used vehicles in strong demand as a consequence.

The company announced it has a net cash balance of approximately £30.0 million compared to net debt of £25.9 million at the same period last year.

Outlook

Lookers announced it has a strong new order book which is above normalised levels. However, the group said there remains material uncertainty as to the availability of these vehicles which is dependent on specific brand and model related factors.

Given the strength of the performance in the period, the Board now expects underlying profit before tax to be “materially ahead” of expectations.

“The Group has built on its record first half result and performed strongly in a challenging market, underpinned by further enhancements to its omni-channel experience, which allows customers the flexibility to buy a car however they choose,” said Lookers CEO Mark Raban.  “Although supply restrictions remain, we continue to work with our OEM partners to minimise the impact and I would like to thank my colleagues and customers for their patience and understanding.”

Marshall Motor Holdings

Lookers isn’t the only car dealership to have reported strong results on Wednesday. Marshall Motor Holdings (LON:MMHM) said it also outperformed the wider car market in September, despite the challenges related to the semi-conductor shortage.

The group raised its guidance for underlying profit before tax for 2021 to be not less than £50 million, from previous not less than £40 million.

 

Lookers lifts expectations again, shares rally
 

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Prithiraj Bachhar
Prithiraj Bachhar Oct 06, 2021 10:04
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