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UPDATE 1-Car dealership Lookers sees FY pretax profit over 60 mln stg
August 13, 2014 / 7:19 AM / 3 years ago

UPDATE 1-Car dealership Lookers sees FY pretax profit over 60 mln stg

(Adds details, CEO quotes)

By Costas Pitas

LONDON, Aug 13 (Reuters) - Britain’s fourth largest car dealer Lookers said it expected to post a full-year pretax profit over 60 million pounds, above market expectations, after it saw a surge in first-half profits spurred on by record sales.

The firm, which sells nearly 120,000 new and used vehicles in Britain every year, reported adjusted pretax profit of 40.2 million pounds ($67.58 million) in the six months to 30 June 2014, up 36 percent.

“We’ll now be expected to nudge over 60 (million pounds) for the year which is OK with us,” CEO Andy Bruce told Reuters on Wednesday.

The market had predicted Lookers, which operates from around 130 sites in Britain and Ireland, would post 2014 full-year profit of 57.38 million pounds according to a Thomson Reuters poll of five analysts.

On Wednesday, the firm said it would now exceed expectations thanks to a record performance from its used and new car sales division, largely thanks to the availability of cheap credit helped by record low interest rates in Britain.

“It’s being driven by these finance packages which are just unprecedented in terms of value for money and...that’s what driving the market,” Bruce told Reuters.

Up to four in five new-car purchases are now made on credit in Britain, with many customers effectively renting a new car - typically for three years - before trading the vehicle in for a new model using a scheme known as a personal contract plan.

Two of Lookers’ major competitors have also posted big profit boosts in recent weeks with one, Pendragon recording a near 100 percent increase in first half profit.

Wednesday’s results add to signs of Britain’s buoyant car market, with new vehicle sales expected to hit 2.45 million in 2014, an estimate raised by 50,000 by the industry body last week.

Lookers also said it would pay an interim dividend of 0.97 pence per share.

$1 = 0.5948 British Pounds Reporting By Costas Pitas, editing by William Hardy

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