Lookers - Piercing the gloom
Lookers issued a Q3 trading statement that reaffirmed management expectations for 2017. It also indicated the initiation of a share buyback programme, as in the absence of any immediate M&A opportunities the recent fall in the share price has made the returns compelling from such an allocation of capital. Clearly, new car sales in the UK are persistently lower year-on-year, with confidence declines among consumers and businesses taking their toll. However, the strength of higher-margin used car demand and aftermarket sales continue to deliver a positive mix. Overall, the rating appears undemanding and the yield attractive.Lookers is a motor retail and aftersales groups in the U.K. Co. is engaged in the sale, hire and maintenance of motor vehicles and motorcycles, including the sale of tyres, oil, parts and accessories. Co. sells new and used cars and light commercial vehicles. Co.'s operations are across the U.K. and Ireland. Co. has one division, motor division. As of Dec 31 2016, the motor division consisted of 160 franchised dealerships representing 33 marques from 102 locations. The business is engaged in the sale of new and used cars, vans and aftersales activities. Aftersales represents the servicing, repair and sale of franchised parts to customers' vehicles.
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