CAR dealer Lookers yesterday posted its sixth consecutive year of profits growth, a double-digit hike in the dividend and said it remained on the lookout for acquisitions to help power further growth.
The group, which owns the Taggarts and Lomond brands north of the Border, increased pre-tax profits to £59.2 million in 2014, up from £43.9m the year before, on revenues up 23 per cent at £3.04 billion.
Andy Bruce, the chief executive of Lookers, said it had been “one of the few businesses to make money in 2008 [during the financial crash]” and recession, and was now able to capitalise on a much better economic backdrop.
Total registrations for the UK new car market last year lifted 9.3 per cent to 2.5 million, a ten-year high. New car volumes at Lookers were up 9.7 per cent.
The company’s total new car revenues jumped 30 per cent, boosted by acquisition activity, with used car sales rising 4.4 per cent.
Bruce said: “We consolidated dealerships [in the tough times] and it is a truism that with the evolution of the internet customers are migrating to the bigger players. They don’t want ‘Portakabin’ operations.
“The market is much more favourable now, and we believe it will grow a little more this year before stabilising. Our balance sheet is also in great shape to make acquisitions, and we always have four or five we are considering at any one time. We are historically disciplined on them, however, we are very fussy.”
Lookers, which already owned Taggarts in Scotland before buying Lomond two and a half years ago, is dominated by the Audi and Jaguar Landrover marques north of the Border.
“Both brands are doing spectacularly well and that has underpinned our performance in Scotland,” Bruce added. He said the company was significantly upgrading its web platform as part of an increasing “multi-channel offering”.
That investment in online is now running at about £95,000 a month, up from £50,000 a year ago. John Stevenson, a sector analyst with broker Peel Hunt, said he believed the upgrade would “ultimately result in the ability to structure the [car] offer entirely online and ultimately take deposit payments and orders”.
Lookers’ aftersales business also continued to perform well, with like-for-like sales up 5.3 per cent last year. Bruce said the group was broadening the range of its aftersales, “including lots of parts for caravans, camping and leisure”.
Group chairman Phil White said: “Our motor division has produced an excellent result during 2014 and we believe there are still further opportunities to develop our existing business in addition to benefiting from acquisitions made in 2014.
“The new financial year has started well with group results to date being in line with expectations. We are therefore confident of delivering further growth in 2015.”
Lookers, which has nearly 130 franchised dealerships and about 30 marques, is paying a final dividend of 1.87p, giving a total dividend for 2014 up 10 per cent at 2.84p. The company’s shares closed down 3p, or 2 per cent, at 150p.
SUBSCRIBE TO THE SCOTSMAN’S BUSINESS BRIEFING