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Agree they labour as negative the very things that are actually positive.
It is as if they wish to fuel negative sentiment.
None the less, profit is superb, cash generation immense, and the recent sale of one site which had a book value of £10m for £28m suggests the true value of the freeholds alone is far in excess of market cap.
To be fair, the £90m probably is pretty one off, as it's due to unusually favorable market conditions which can't be expected to last forever.
But that didn't come as news yesterday, I too struggle to see why anyone would want to sell after results for 10% less than they could beforehand.
Edward, not sure what the company needs to do but am sure it needs to say; with the chip shortage we are making good profits in the secondhand market and when the chip shortage eases we will make good profits in the new car market, rather than waffle on about challenges and exceptionals. They need to demonstrate they have tactics for both or sell up to someone who can.
The business is now for free , why private equity have not swooped in is beyond me. The market has such a downer on the company any figure north of 110p would probably tempt share holders.
What has this company got to do to achieve a sensible P/E?
I get the impression the chairman's description of the £90m profit as 'excepional' is the problem.
It is being interpreted as 'one off' rather than 'incredibly good'.
yeah,seems cheap....p/e wise
https://www.proactiveinvestors.co.uk/companies/news/978958/lookers-to-step-up-investment-after-profits-surge-fivefold-978958.html
Well really great results, inflationary costs will be passed on and yet the share price falls from a very low P/E already plus NAV/PS is about where the current SP is when you add back the cash. I can’t begin to figure it out. Logic just shot out the window with great big wings on it.
Real estate valued at 75p per share.
Earnings of 20p per share
Share price of 95p per share.
So we're on a PE of 1
Not quite but p/e is just single figures = stunning results -rerate due here
Oi Oi - My take is if they can get enough new and used car inventory the Sales, profit and everything else will be fantastic numbers. It will also be interesting to see the net book value of their properties aside the recent sale and leaseback. Properties continue to rise so having them re independently valued would make the balance sheet look really great I think. This tick all the boxes of a Warren Buffet super smart investment in my opinion. We also shouldn’t forget Constellation paid 102p per share to acquire their stake a while back. To me that’s a fair value floor and I find it hard to understand why it trades below 102p. I guess it’s just the markets in general. When the tide goes out all the boats sit lower on the horizon. The tide will turn as it always does and I’m very very excited to be invested in Lookers right now!
Well, we know it is about to report profit from trade for 2021 above £80m (giving a sub 5 P/E).
So yes, trade is very good , as well as the property portfolio being hugely undervalued.
Bought into Lookers about 4 months ago - for the long term property play. Interested to hear people's thoughts on the actual car business side of things. I get the feeling it's going well - simply from looking at how prices have gone north but does that translate into profit (you're having to buy in this market, the 2nd hand stuff I mean)?
To be fair, it is just 1 site out of nearly 200.
The really interesting thing it how far in excess of book value the sale price is.
Agree that sale and leaseback is probably not the best strategy in the long term. However should Constellation wish to purchase our shares at a nice premium then they can do what they like with the freehold properties.
It is ever amazing that Directors sale and leaseback properties, which is something they would never do to their own properties in their private lives.
Just storing up problems for the future: just look at the supermarkets who are now stuck in leases with too bigger sites for today's needs. Car dealerships will probably go the same way but hey the current Directors will not be around to sort the mess out.
And that site had a book value of £10m.
£28m for 1 site. Hilarious.
And some stake building as well
Lots of steak building going on now. I think it’s going to get very interesting very quickly. Hopefully not before results are out. We don’t want any low ball take overs. Fair value should be 150p ish.
PDG profits up tenfold today augers well here.
Well I’m very surprised at the takeover rumours over at Pendragon that look to have real teeth when you think how asset and cash rich Lookers is currently. I expect we will get a hard bid soon from Constellation as they won’t want to wait too long. The results will create a higher valuation for sure, will they strike before publication (Hope not).
If you say so, Monty. Have you seen the price of coal?
Remember my tip when the 2021 figures are released...
Bisichi - No where near mate. Tiny company not cash generative. Lookers are Premier League Bisichi is Sunday Park side penny share.
There are a number of shares out there whereby you can buy £10 with a £5 note.
Lookers is certainly one of them. Bisichi PLC even more so.
I’ll drink Stella to stellar results as well :)