Lookers seen as good buy for investors as analysts upgrade forecast once again

  • Pre-tax profit estimate for 2021 rises to £40.2m, with 2022’s up to £51.9m
  • 2021 EBITDA forecast revised upwards to £72.1m and 2022’s is higher as well at £81.9m
  • Potential investors are told that ‘risk/reward remains positive’

Time 5 months ago

Automotive industry analysts have upgraded their forecast for Lookers for the second time in two months.

It follows the news that the dealer group had renewed its banking arrangement with a consortium of banks to extend its credit facility until September 2023.

In an announcement to the stock market yesterday (May 25), the dealer group confirmed a revolving facility was now in place for £150m. Previously, it was £250m.


It also said 2021’s underlying pre-tax profit would ‘comfortably exceed current market consensus’.

In April, independent investment banking operation Zeus Capital increased its forecast for Lookers’ pre-tax profit to £34.2m in 2021 and £48.1m in 2022, after it was relisted on the stock exchange.

But today (May 26), Zeus Capital investment research analyst Mike Allen said in a note to potential investors that it was increasing its 2021 pre-tax profit forecast by 17.5 per cent to £40.2m.

Meanwhile, for 2022, it was upping its forecast by 7.9 per cent to £51.9m.

In addition, the EBITDA forecast for 2021 has been revised upwards by 8.9 per cent from £66.2m to £72.1m, while Zeus’s estimate for Lookers’ 2022 EBITDA has gone up by 4.9 per cent to £81.9m from £78.1m.

Allen wrote: ‘The group’s strong trading performance should help continue the restoration of its reputation among investors and raises the possibility of a resumption of dividend payments. We believe the risk/reward remains positive.’

Lookers’ share price closed steady at 69p yesterday.

It will release its audited preliminary results for the year ended December 31, 2020 in the second half of June, with its 2021 interim results set to be announced during September.

Lookers timeline: What’s happened when? 

Click on the date to read the full story

May 25, 2021 – Lookers renews banking facilities as it agrees credit deal with banks

April 9, 2021 – Motor trade analysts upgrade their forecast for Lookers as share price jumps again

April 8, 2021 – Lookers reveals its performance for first quarter of 2021 was ahead of board expectations in unscheduled announcement to Stock Market.

March 18, 2021 – Lookers said it expects to make a profit before tax of around £10m for 2020 – up from £4.2m for 2019 as it reveals talks with banks are ‘progressing’.

March 15, 2021 – Lookers’ previous auditors Deloitte under investigation by Financial Reporting Council of its work on the group’s accounts in 2017 and 2018.

March 2, 2021 – FCA investigation closed and no fine imposed on Lookers. FCA expressed ‘concerns’ relating to ‘historic culture, systems and controls’, but said no further action would be taken.

January 29, 2021 – Lookers revealed it lost £36.1m in the first half of 2020. The interim results led to shares being relisted on London Stock Exchange. They immediately rose 77 per cent.

January 6, 2021 – Lookers appoints Anna Bielby as interim chief financial officer, but there was no news on the delayed interim results.

December 29, 2020 – A third of shareholders vote against Lookers directors’ remuneration packages – including CEO Mark Raban’s £450k salary – at a general meeting.

December 18, 2020 – Lookers tells investors that its interim results, promised to be delivered before the end of the year, will now not be published.

December 9, 2020– Lookers reveals interim CFO Jim Perrie has quit early and says it is ‘unlikely’ the interim results will be out before the end of the year.

November 25, 2020 – Lookers finally releases its annual accounts for 2019 showing a statutory loss for 2019 of £45.5m. Promises interim results in December and the hopeful reinstatement of shares on Stock Market.

October 31, 2020 – Long-standing Lookers non-executive director Tony Bramall, one of the group’s major investors, brings forward the date he will leave the board to the end of December. No reason is given for his early departure.

October 19, 2020 – Lookers updates market on performance in Q3, but still no word on its 2019 accounts or the FCA investigation. Analysts expect results to be out before December.

August 20, 2020 – Accounts delayed for fourth time and no promise given as to when they’ll be published.

June 9, 2020 – Lookers says it will suspend shares on July 1. Delays accounts for third time and says they’ll be published ‘no later than the end of August 2020’.

June 5, 2020 – Lookers says it will axe 12 dealerships and cut 1,500 jobs.

May 2020 – Pendragon CEO Bill Berman admits he wrote to Lookers to discuss a merger and updates Stock Market to that effect. Move described as ‘two drunk men bumping into each other in a bar’.

April 2020 – Fraud investigation deepens. £4m charge revealed and firm says there could be more. Delays accounts to June.

March 12, 2020 – New chief operating officer Cameron Wade leaves role after only a month in post.

March 11, 2020 – Lookers delays results, saying that in final stages of preparation ‘potentially fraudulent transactions’ in one division were discovered. Promises results in April.

Get more from Car Dealer

  • Premium stories
  • Used car data
  • Magazine early access

November 2019 – Chief executive Andy Bruce and chief operating officer Nigel McMinn leave firm abruptly.

June 2019 – FCA launches review into sales processes at Lookers between January 2016 and June 2019. Lookers cannot ‘estimate what effect, if any, the outcome of the investigation may have’.

December 2018 – Lookers launches independent internal audit into sales process. It eventually finds ‘control issues’ in sales process where ‘improvements’ are needed. Findings handed to FCA.

John Bowman's avatar

John has been with Car Dealer since 2013 after spending 25 years in the newspaper industry as a reporter then a sub-editor/assistant chief sub-editor on regional and national titles. John is chief sub-editor in the editorial department, working on Car Dealer, as well as handling social media.

More stories...

Server 51