Looks good for investors as Lookers restores divi

CAR dealer Lookers, which trades in Scotland under the Taggarts name, has restored its dividend after strong advances by its parts division and a market-beating rise in new car sales.

The Manchester-based group posted a record trading performance for the first half of the year, helped largely by a surge in demand for spare parts as more drivers preserve their wallets and maintain their older vehicles.

New car sales were 26 per cent higher than in the first half of last year, despite the closure of the UK government's scrappage scheme at the end of February.

Peter Jones, chief executive of Lookers, said market conditions remained tricky, given the impact of lingering economic uncertainty on consumers' confidence to go out and purchase big-ticket items. However, he added that the group was "very encouraged" by the results delivered during the first six months to the end of June.

Overall group profit was 22.7 million, up from 17.6m previously. Turnover rose 13 per cent to 988.3m.

Sales of parts, which are led by Lookers' national distributor FPS, were 19 per cent higher in the first half. Profit before tax rose 14 per cent to 6.9m.

Lookers sold 32,469 new cars in the first half, up 26 per cent on the same period a year earlier and ahead of broader UK market growth of 20 per cent.

Although industry figures released earlier this month showed a fall in new car sales during July, Jones said the market should continue to grow marginally during the second half.

Lookers has 122 franchise dealerships across the UK. These include the Taggarts Motor Group operations in Motherwell and Glasgow, which were acquired by Lookers in February 2003.

The group's used car sales slumped 6 per cent in the first half due to a collapse in trading during January's severe winter..