Interim Results Half Year Ended 30 June 2009

Transcription

1 Interim Results Half Year Ended 30 June 2009 Presented by Ken Surgenor, Chief Executive Robin Gregson, Finance Director Peter Jones, Managing Director - Motor Division 1 1

2 Overview Strong first half result ahead of expectations delivered against the background of a challenging market Group continues to benefit from diversified business model with strong performances from both Motor and Parts Divisions Motor Division has increased pre tax profit despite challenging trading conditions Excellent performance from independent parts distribution Successful fundraising completed with proceeds used to pay down debt and improve banking facility terms Stronger and more efficient business with improved flexibility from which to pursue future development strategy 2 2

3 Lookers plc - structure Motor division Independent Parts division New and used vehicles Aftersales services 33 marques Wide geographical coverage 121 franchised automotive dealerships from 79 sites 2 used car supermarkets FPS - UK independent branded same day parts distributor operating through 19 regional outlets with a national distribution centre APEC - UK independent braking parts distributor BTN - independent distributor of turbocharger units worldwide 3 3

4 What differentiates Lookers? Diversified business model No over dependence on a single marque Aftersales and parts represent a significant proportion of gross profit Entrepreneurial culture fostered by a decentralised management structure High level of property backing (NBV 181m) Business model has delivered Resilient trading despite economic turmoil Results from aftersales and independent parts distribution have supported group performance despite lower new car sales 4 4

5 Financials Financials 5 5

6 Financials at a Glance Change Turnover 870.4m 1,039.2m (16%) Operating Profit* 26.1m 26.0m 0.4% Operating Margin 3.0% 2.5% Interest (8.5m) (10.5m) 19.0% Profit before tax* 17.6m 15.5m 13.5% Earnings per share* 6.77p 5.85p 15.7% Interim dividend - 1.6p - * Adjusted before amortisation, exceptional items and debt issue costs 6 6

7 Turnover & Profit Contribution T/O % Gross Profit % Op. Profit % T/O % Gross Profit % Op. Profit % New Car Used Car Aftersales

8 Exceptional Items Refinancing costs Profit on sale of properties Closure costs/loss on termination of businesses Integration costs Aborted acquisition costs Other 2009 m (5.2) 0.4 (2.0) (0.2) (0.2) (0.5) 2008 m - - (1.0) (0.6) - - Exceptional items included within operating profit Bank arrangement fees in the balance sheet (7.7) (3.5) (1.6) - Cash impact of exceptional items (11.2) (1.6) 8 8

9 Balance Sheet Fixed Assets Stocks Debtors Working Capital Non Current Liabilities Net Assets Net Debt Adjusted Net Assets Gearing Net Debt / EBITDA 30 June 2009 m (207.8) * 153.1* 51%* June 2008 m (5.3) (168.1) % 2.1 * Adjusted on a pro forma basis for share issue 9 9

10 Asset Backing PROPERTIES Freehold Long Leasehold Total NBV JUNE 2009 m NBV JUNE 2008 m

11 Summary of Cash Flow Cash (absorbed by) / generated from operations Investment in acquisitions/fixed assets Proceeds from disposals Increase/(decrease) in loan facility Interest paid (net) Dividends paid Tax refunded/(paid) 2009 m (2.2) (4.0) (8.0) m 44.4 (6.5) 0.3 (13.5) (9.6) (3.9) (1.2) Increase in cash and cash equivalents

12 Rationale for the Equity Issue 76.5m reduction in bank debt Secures improved banking facility terms based on proforma net debt of 73.0m Provides a more suitable capital structure for the current economic environment with target leverage of c.2.0x bank debt to EBITDA Significantly reduces borrowing costs by c. 16.7m between July 2009 and December 2011 Improves headroom on dividend restrictions, allowing an earlier return to a progressive dividend policy (expected 2010) Improves the Company s ability to secure debt facilities on more favourable terms in the future 1212

13 Appendices Operational Review 1313

14 Motor Division Review of restructuring Business Restructuring 21 loss making businesses, including 9 satellite businesses, closed to strengthen hub operations 7 marginal businesses strengthened through dual franchising Cost Base Focus New and used vehicle stocks reduced by 68.5m year on year Headcount in continuing businesses reduced by 302 in HY2 08 Headcount in discontinued businesses drove further reduction of total company pay freeze 1414

15 Motor Division Strong platform for 2009 Restructured division, 121 franchises, representing 33 marques from 79 sites Like for like headcount base reduced by 6.0% Used / Demonstrator stock reductions have reduced interest costs by 2.6m Overall cost base reductions deliver 12m per annum recurring savings Direct costs reduced by 6.3%, 4.3m on a like for like basis, indirect costs held at 2008 levels Consolidated market area results are transformational Well positioned for targeted growth 1515

16 Motor Division NEW CARS Total UK new car market down 25.9% Group sales down 19% - 7% ahead of the market Lookers gaining market share up to 2.85% (2008: 2.6%) Gross margin: 7.6% Finance income penetration at 57% Reduced demo / fully paid inventories UK Government scrappage scheme generating incremental income (3,000+ orders) Full year forecast upgraded to 1.825m units 1616

17 Motor Division USED CARS Full recovery in used car values Volumes up 8.5% for first six months of the year Gross margin: 10.2% Finance income penetration held at 35% Leaner inventory - half stock turn 1717

18 Motor Division AFTERSALES Revenues and margins are above 2008 levels for the period Gross profit increased Group continues to increase market share Improved marketing initiatives 1818

19 Independent Parts Division Sales growth up 15% Profit before tax increased by 34% FPS - Continued investment in Sheffield NDC - Relocation of Glasgow facility (September) - Relocation / expansion at five regional depots - E-business development (43% of sales) - Launched car care programme - Strengthened/expanded operations resource - Focus on new product ranges - Launch of new own label products APEC - Sales growth up 20% - Launched new marketing initiatives - Focus on new product ranges and availability BTN - Relocation to larger facility - Improved penetration of motor factor customers 1919

20 Summary Strong trading performance for the half year above expectations Equity issue provides a stronger and more flexible capital structure and significantly reduces borrowing costs Diversified business model continues to provide flexibility in difficult trading conditions Strong performance from Motor Division which is well placed to trade through downturn Full benefit of 12m of recurring cost savings in the current year and interest savings on working capital reductions Strong performance from Motor Division Independent parts division having a record year Experienced management team Return to a progressive dividend policy (expected in 2010) Group is well positioned to take advantage from economic recovery 2020

21 Appendices Appendices 2121

22 Balanced Geographical Coverage Key Representation Conurbation 2222

23 2323

24 Franchise and Distribution Outlets FRANCHISES Prestige Franchises Alfa Romeo Cardiff Aston Martin Bentley Chrysler, Jeep, Dodge Ferrari Honda Bexleyheath Derby Liverpool Nottingham Southport Warrington Hummer Jaguar Glasgow Motherwell Land Rover Bishop's Stortford Chelmsford Colchester Glasgow London - Battersea London - Park Royal Motherwell Lexus Hatfield Maserati Mercedes-Benz Ashford Brighton Canterbury Eastbourne Gatwick Maidstone Redhill Tonbridge Saab Chester Liverpool Smart Brighton Maidstone Tonbridge Volvo Colchester Glasgow Motherwell Volume Franchises Chevrolet Liverpool Warrington Yardley Citro n Blackpool Liverpool Preston Fiat Northwich Stockport Ford Braintree Chelmsford Clacton Colchester Macclesfield Sheffield South Woodham Ferers Sudbury Witham Hyundai Dundonald Motherwell Kia Stockport Mazda Motherwell Nissan Altrincham Chester Newtownabbey Peugeot Cardiff Newport Renault Altrincham Chelmsford Chester Colchester Macclesfield Newtownabbey Newtownards Stockport Seat Stockport Toyota Chelmsford Newtownabbey Rayleigh Romford Vauxhall Birkenhead Birmingham Blackburn Chester Ellesmere Port Lisburn Liverpool Portadown Selly Oak Speke St. Helens Wallasey Warrington Widnes Yardley Volkswagen Battersea Blackburn Blackpool Boston Burnley Darlington Lincoln Morden Northallerton Preston Teesside Motorcycles BMW Newtownabbey Yamaha Tyres Boucher Road Sydenham Road Coleraine Dundonald Omagh Portadown USED CAR SUPERMARKETS Bristol Burton-on-Trent PARTS DISTRIBUTION FPS Sheffield Barking Birmingham Bristol Cardiff Charlton Colchester Glasgow Leeds Leicester Liverpool Luton Maidstone Manchester Newcastle Nottingham Preston Reading Southampton Staples Corner APEC Bristol BTN Turbocharger Uxbridge AGRICULTURAL DIVISION Darley Dale Tuxford 2424