Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Don’t be shocked it Vertu try and buy lookers. Today the market cap of Vertu is £10m more, just doesn’t make any sense for anyone who knows what Lookers have and what Vertu own.
Today Lookers are valued at less than 50% of what their property is worth, this alone doesn’t make sense. Lookers expect to make £40m in fy 2022. This would put the company on a p/e of 3.5 and excludes freehold property of £310m
Yes agreed but people do like knowing they can return to the dealer they purchased their vehicle from for servicing and warranty or goodwill work. It’s all about the full package and customer care. We all know how stressful it is when dealing with call centres hundreds of miles away who don’t really understand the customers issues.
I can only presume everyone is sleeping and nobody has noticed that Vertu have a market cap of £136m and LOOKERS is only £13m more. There is a massive upside to lookers potential, their property portfolio alone is today valued at £310m and they have forecast £36m for H2 2020.... This is worth at least 100p.
The company will not be doing any fundraising , they are in advanced discussions with their bankers to continue their excellent relationships.
VW CEO Tells Managers to Prepare for ‘Significant’ Market Upturn
By Christoph Rauwald
1 February 2021, 20:22 GMT
Volkswagen AG Chief Executive Officer Herbert Diess provided an upbeat outlook for the back half of this year even as Covid-19 and a global shortage of semiconductors is poised to hit first-quarter results.
“I am looking forward to 2021 and I expect that the global economy will see an upturn in the second half of the year, by which time we should see ongoing vaccination programs take effect,” Diess told executives in an internal webcast Monday, according to remarks seen by Bloomberg News. “Then I expect people to buy more cars. We should prepare for a significant upturn.”
The webcast was Diess’s first with top managers this year and was attended by new VW group management board members Murat Aksel and Thomas Schmall. A VW spokesman confirmed the remarks.
Europe’s largest automaker lost the top spot in global sales to Toyota Motor Corp. last year, but it sold more electric cars than Tesla Inc. in Europe and is escalating the world’s biggest push into purely battery-powered vehicles. VW will roll out the ID.4 crossover under its namesake brand in 2021 and add more versions of the Audi e-tron and Porsche Taycan models. The two luxury brands generate the biggest chunk of profits for the German industrial giant.
Diess said last month during a U.S. investor roadshow hosted by UBS Group AG that VW expects to sell roughly 600,000 purely battery-powered cars this year, with the ID.4 accounting for 150,000 cars. He emphasized though that VW will seek to protect margins while boosting sales volumes.
The CEO and key stakeholders agreed in December to hammer out a deal in the first quarter to lower fixed costs and material expenses to become more nimble. Diess acknowledged Monday that VW navigated the dramatic industry slump last year less well than some of its rivals.
“We have set ourselves the target of reducing overheads by 5% and material costs by 7%,” Diess said. “This is necessary so that we have the strength to finance topics important to our future ourselves, since our market capitalization and governance structure do not allow us to raise additional equity.”
PEEL HUNT BROKER NOTE
Interim results show Covid impact. With H1 sales down 40% as UK new car registrations fell by c.49% over the period, Lookers reported an Adj loss of £36m, actually much better than feared (PHe -£50m), with the outperformance driven by stronger gross margins. H1 net debt improved to just £11m (Dec 19 £59.5m).
Substantial operational improvements. Towards the end of FY19, Lookers was carrying stock of £240m, average used stock levels are now c.£145m. This has not had an impact on sales volumes; average stock turn is 35-40 days rather than the 55-60 days before. Previously c.30% of stock was over 60 days old, vs 6-7% of stock in September 2020. With much faster stock turn, margins have improved materially, one of the key reasons for H1 outperformance and our full-year upgrade. Lookers has saved annualised payroll costs of c.£50m, representing c.1,500 heads.
Forecast changes. As with many retailers, Lookers has yet to give revised guidance due to the uncertainty of Lockdown 3. With H1 c.£14m ahead of forecast and the improvements in working capital driving better used car margins, coupled with the restructuring and payroll savings starting to come through in H2, we upgrade our full-year loss to £3.8m from c.£20m. For FY21, we forecast PBT of £23.7m, an upgrade of £3.1m. Were it not for Lockdown 3, we would have been more optimistic with our profit forecasts.
Twelve month target price set at 75p for relisting. Lookers is starting to look like a business transformed, with used car margins benefiting from much greater focus on working capital management and basic controls and a more efficient cost base. The customer journey is also much easier, with unaccompanied test drives (saving 25 mins), no lengthy document signing processes (now sent to customers’ homes) and contactless handover. The key question is what does normal look like? Cost savings will annualise into FY21 (c.£15m net benefit) and car margins will continue to recover thanks to working capital improvements. SMMT market forecasts of two million new car registrations (+25% from 2020) looks optimistic given Lockdown 3 and is likely to be revised down, we’re forecasting 15% growth at Lookers. Longer term, the path back to 1.5% PBT returns on sales seems a sensible expectation for normal, a level of profitability materially ahead of our current forecasts.
Valuation .
THE TIMES ——Lookers on road to recovery after seven-month stock market suspension
Peel Hunt reckons the shares are worth 75p, a 2021 earnings multiple of 16.
The car retailer Lookers has bounced back from seven months in the stock market sin bin, calming fearful investors by indicating that it should book only a small loss for 2020.
The stock was suspended at 21p last July after the motor dealer, hit by fraud and mis-selling, was unable to produce its 2019 results on time. After trading started again yesterday, the shares nearly doubled to close at 39½p.