LOOK.L Regulatory News (LOOK)

14 August 2019

LOOKERS plc

Interim Results for the six months ended 30 June 2019

Lookers plc, ("Lookers" or "the Group"), one of the leading UK motor retail and aftersales service groups, announces its unaudited results for the six months ended 30 June 2019 ("H1", "first half" or "the Period").

Key financials:

Highlights:

·; Increase in total revenue of 2.7% with growth in both used cars and aftersales. Like-for-like revenue growth of 0.1%

·; Underlying PBT of £29.2m, down -27.5% reflecting a challenging UK market backdrop

·; Continued outperformance of the UK new car market. New car unit like-for-like sales down -1.2% versus UK market decline of -3.4%

·; Resilient aftersales performance with like-for-like revenue growth of 6.2%

·; Restructure and strengthening of regulated activities. One off investment identified of approximately £10.0m, creating a stable platform for future growth and an enhanced customer experience. Remediation plan well underway

·; Strong balance sheet with net debt of £73.9m (2018: £54.5m) down from £86.9m at 31 December 2018

·; Interim dividend maintained at 1.48p (H1 2018: 1.48p)

·; Valuable property portfolio with a net book value £312.1m of freehold and leasehold property (net book value 80p per share)

Andy Bruce, Chief Executive of Lookers, said:

"Our performance for the first half reflects an ongoing backdrop of challenging UK market conditions for the sector. Whilst we are reporting lower profits year-on-year, we have made good progress on a number of strategic initiatives and have a clear investment plan to restructure and strengthen our regulated activities. Our balance sheet remains strong including our valuable property portfolio. Working closely with our brand partners I am confident in the long-term prospects for the business. The Board's current outlook for the full year at the underlying profit before tax level remains unchanged."

There will be an analyst presentation today at 9.30am, taking place at MHP Communications, 6 Agar Street, London, WC2N 4HN. The presentation will also be accessible via a live conference call for registered participants. To register for the call please contact MHP Communications on +44 (0)20 3128 8193, or by email on lookers@MHPC.com.

 Enquiries

About Lookers plc (www.lookersplc.com)

The Group's principal activities are the sale of new and used cars, vans and aftersales activities. The Group's businesses have a total of 165 franchised dealerships representing 31 manufacturers, operating from 110 locations across the UK and Republic of Ireland.

In 2019 Lookers have once again been listed as part of 'The Sunday Times Best Companies to Work For' ranking of the UK's top employers. Lookers was the best performing dealer group in the 2019 survey.

Lookers' Apprenticeship Programme continues to be one of the best in the country, recognised as Highly Commended at the National Apprenticeship Awards. Once again, the Apprentice intake has increased in 2019, with over 170 vacancies across the Group.

Cautionary statement

This Interim Report has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The Interim Report should not be relied on by any party or for any other purpose.

The Interim Report contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

 Introduction

Our trading performance for the first half of the year reflects a very challenging economic backdrop and our underlying profit before tax has reduced year on year to £29.2m (2018: £40.3m). Whilst H1 began in line with expectations, trading during the three months ended 30 June 2019 ("Q2"), against strong comparatives, proved increasingly challenging. During Q2 the UK new car market continued to decline, with registrations down -4.6% (Q1: -2.4%) versus the comparable period last year. In addition, more subdued demand and the resulting pressure on used car values resulted in a weaker used car margin, which was most notable during June.

The Group's balance sheet remains strong, underpinned by a valuable freehold property portfolio, committed and extended bank funding facilities and strong operational cash flow generation.

Financial review

From 1 January 2019 the Group adopted the new accounting standard IFRS 16: Leases. This standard introduces a comprehensive model for the identification of lease arrangements and accounting treatment for both lessors and lessees. Unless otherwise stated, the prior period financial comparatives contained within these statements have been restated to reflect the first-time adoption of IFRS 16. Further details of this restatement can be found in note 1. At 30 June 2019 the Group has right-of-use assets with a net book value of £81.7m, related lease liabilities of £105.1m and have repaid £6.0m of lease liabilities in the Period. In addition, the Group has reclassified the amortisation of intangible assets to the underlying earnings of the Group and restated the financial comparatives accordingly.

Revenue increased by 2.7% to £2,646.4m (2018: £2,576.5m). Like-for-like revenue grew 0.1% with encouraging growth in used cars, aftersales and leasing / other. In particular, our important high margin aftersales department showed resilient like-for-like revenue growth of 6.2%.

Gross profit increased by 1.4% to £274.2m (2018: £270.5m). Gross margin at 10.4% was -14bps below last year. Used vehicle gross margin at 6.6% was -60bps below last year being partly offset by a more favourable aftersales mix.

Underlying net operating expenses of £231.4m represented 8.7% of revenue, which were 6.4% above last year (like-for-like 5.0%). Inflationary and structural cost pressures continue to impact the Group particularly in the areas of labour and property occupancy costs. Recent cost headwinds impacting all retailers have been well documented and the Group is pursuing several initiatives to mitigate these effects.

Net interest costs increased in the Period to £13.6m (2018: £12.7m) principally due to the increase in the bank base rate in August 2018 and revised terms of the Group's revolving credit facility ("RCF").

The Group incurred £4.3m of non-underlying costs, including a charge of £2.0m in relation to the restructure of its regulated activities (discussed further below). This compared to a net non-underlying profit of £1.0m last year including £3.3m relating to profits from the disposal of property.

The Group's reported effective tax rate is 19.3% (2018: 15.5%), with last year being impacted by property transactions.

The Group maintained a strong level of operational cash flow in the Period with cash generated from operations of £79.0m (2018: £63.1m). We have invested £21.7m of capital expenditure during the Period in improving dealership facilities as part of our ongoing strategic investment programme. We also received £3.4m from the disposal of two properties. Total net debt at 30 June 2019 was £73.9m (2018: £54.5m) compared to £86.9m at 31 December 2018.

With the reduction in net debt in the Period, the Group continues to benefit from a strong balance sheet that supports further investment in new and improved facilities, operational capabilities and potential acquisition opportunities. The net book value of freehold and leasehold properties of £312.1m (equivalent to 80p per share) at the end of the Period remains a key strength of the business.

The Group's bank facilities were renewed in December 2018 and consist of a revolving credit facility of £250.0m arranged with five banks, (Bank of Ireland, Barclays, HSBC, Lloyds and NatWest), with a term to March 2022 and an option to extend to March 2023. There is also an option to increase the facility up to an additional £50.0m to fund potential future acquisitions.

Dividend

In line with the Group's progressive dividend policy the dividend paid has increased significantly in recent years. Despite the results for the first half and the challenging trading conditions, given the Group's strong balance sheet the Board has decided to maintain the interim dividend this year. The interim dividend of 1.48p per share (2018: 1.48p) will be payable to shareholders on 22 November 2019. The ex-dividend date will be 17 October 2019 and the record date will be 18 October 2019. The Board intends to undertake a review of the current dividend policy in light of the Group's trading performance and future cash flows before the publication of the Group's Annual Report & Accounts.

Board changes

We recently announced that, as part of our succession planning, Robin Gregson, CFO, was to step down after ten years in the role. Together with my colleagues on the Board I would like to thank him for his significant contribution and wish him well in the future.

We were also pleased to announce the appointment of Mark Raban as CFO and we welcomed Mark to the Board on 15 July 2019. Mark has nearly 30 years of multi-channel retail experience and was most recently CFO at Marshall Motor Holdings plc for four years.

Operating review

The results for the first half reflect the challenging market conditions experienced during the Period. The key aspects of our performance were:

·; The Group continued to outperform the UK new car market. Total like-for-like new car unit volumes were -1.2% down compared to a UK market decline of -3.4%

·; Continued growth in used car revenue partly offset by margin pressure experienced during Q2

·; Further progress in aftersales driven by a 6.2% growth in like-for-like revenue

We operate 165 franchised dealerships representing 31 manufacturers from 110 locations. During the Period, we continued our strategy of operating the right brands in the right locations and reduced the footprint by five dealerships. Following the acquisition of Jennings in 2018, we have now closed the Seat and Mazda sites in Middlesbrough and Kia in Sunderland. As part of our rationalisation programme agreed with Volkswagen, we have closed two sites: our Morden site where much of the business will transfer to our flagship Volkswagen Battersea dealership, which opened in January 2019 after significant redevelopment; and our dealership in Dumfries where much of the business will transfer to our Volkswagen dealership in Carlisle.

The number of new cars sold per annum in the UK has reduced from a peak of 2.69m in 2017 to 2.37m in 2018, with a further reduction expected this year. Our share of the retail sector of this market is 6.1% up from 4.0% in 2011. We continue to see significant opportunity to further grow our market share and increase sales volumes within the UK used car market, which currently has annual transactions of approximately 8m vehicles.

Aftersales represents the servicing, repair and sale of franchised parts. In the UK there are approximately 36m cars and light commercial vehicles, with a significant proportion under three years old. This is the predominant market for franchised motor dealers and we are focused on developing the aftersales business and investing in our offering through initiatives to increase volumes and margins.

The internet remains the primary means for our customers to research and determine which new or used cars they are interested in buying. We have now migrated to our new and considerably improved website on a phased basis and this is now fully operational across all dealerships. This has resulted in further increases in our visitor and enquiry levels. The customer experience will be enhanced by further significant improvements in functionality, which will allow interaction with our customers.

Analysis of revenue and gross profit

New cars

The sale of new cars represents 31.0% of total gross profit. The new car market reduced by -3.4% in H1 to 1.27m units, with a reduction of -2.4% in Q1 and -4.6% in Q2. Q1 benefitted to some extent from a pre-Brexit pull forward of demand. During H1 we outperformed the UK market with like-for-like unit sales of new cars down -1.2% versus last year.

Like-for-like unit retail sales reduced by -5.9% compared to the market reduction of -3.2%. In Q2 the market was partly inflated by some dealer pre-registration activity and we took a disciplined approach to managing our inventory.

The fleet sector continues to represent a significant part of the market, providing scope for further growth whilst taking a sustainable and balanced approach to maintaining margins. In H1 the Group's like-for-like fleet unit sales increased by +4.3% compared to a market decline of -3.6%.

The Society of Motor Manufacturers and Traders ("SMMT") estimated in August of this year that new car volumes will be -2.2% lower for 2019 compared to 2018, at 2.32m units. Nonetheless, this is still a relatively healthy outlook compared to historic levels of new car volumes and provides opportunities for us to continue to increase market share, particularly as the brands in which we have significant representation tend to outperform the wider market. The month of September is important for the industry and our new car order take is currently building as expected. Our relationship with our manufacturer partners remains a critical part of our success and we continue to work closely with them to achieve a mutually beneficial commercial relationship, underpinning the potential to develop further with them in the future.

Used cars

The used car market had a mixed performance in the Period with a robust Q1, followed by reduced demand and falling used cars prices in Q2. This had a pronounced impact on margins and used car profits. Used cars contribute 25.9% of total gross profit.

Group like-for-like used unit sales increased by 2.0%, compared to last year. However, gross margin from used cars deteriorated during the Period by -60bps, principally driven by used vehicle residual value pressure in Q2. Given the effect this had on used car pricing in June, we took a disciplined approach to managing inventories in the month, which had a negative impact on profitability but mitigated against further residual value pressures.

The used car market represents a significant opportunity for the Group and we plan to continue to grow our used car business, building on the successful growth we have achieved in recent years.

Aftersales

Our higher margin aftersales business, which represents 40.1% of gross profit, has performed well in the Period.

Like-for-like revenue increased by 6.2% compared to 2018 and gross profit decreased by -140bps largely due to a one-off parts volume bonus received in H1 2018. Excluding the impact of this, the underlying margin was broadly level. We have increased capacity when developing new dealership premises in recent years, which has expanded the base infrastructure to support higher volumes and growth in the car parc. In addition, aftersales has also benefited from the initiatives we have implemented to develop our services, with an emphasis on performance and improved customer retention through enhanced technology, as well as an increase in the penetration of customer service plans sold.

Risks and uncertainties

There are a number of potential risks and uncertainties which could have a material impact on the Group's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results. The Board believes these risks and uncertainties to be consistent with those disclosed on pages 34 to 36 in the 2018 Annual Report & Accounts. Notwithstanding this, the Board believe that the adverse risk factors associated with Brexit have generally increased during the Period. An update on the risks associated with the review of regulated activities are discussed below.

Review of regulated activities

As previously announced, during 2018 the Board became aware of certain matters requiring review in relation to the Group's regulated activities. In December 2018, the Board commissioned an independent review of the Group's internal control, risk assurance systems and internal audit. This review, which we shared with the FCA, indicated that there were some control issues in the sales process in the Group's regulated activities, which would require an improvement plan to be implemented.

The Group has now finalised its improvement and remedial action plan. It is anticipated to require a one-off cash investment of c.£10m (2019: c.£7m, 2020: c.£3m). The remediation plan will include a detailed review of past business; establishment of a revised sales process; a full training exercise across the Group; establishment of a new risk management and quality assurance frameworks; and several developments to the Group's IT systems. In addition to this one-off investment, ongoing underlying operating costs in 2020 and beyond are expected to increase by c.£3m per annum to deliver best practice and an enhanced customer experience.

Of the anticipated c.£7m one-off investment in 2019, £2m has been included within non-underlying items in the Period.

As announced on 25 June 2019, the Group has been informed by the FCA that it intends to carry out an investigation into sales processes between the period of 1 January 2016 to 13 June 2019. This investigation has not yet started. With the full support of the Group, the FCA will reach its conclusions in due course. At this stage the Board cannot estimate what effect, if any, the outcome of this investigation may have.

The Board takes this matter very seriously and continues to co-operate and co-ordinate fully with the FCA. We believe that adapting to developments in regulation, which affects the retail motor industry and the fast pace of changing customer demands and behaviours, is a key challenge and an important priority for the Group. When these improvements are fully deployed across the Group, our strengthened infrastructure and enhanced customer experience will create a robust and industry leading platform that will facilitate further growth.

We will provide further updates as appropriate.

Outlook

Despite the more challenging market conditions in H1, particularly Q2, the Group has maintained its strategy of strong operational execution and a focus on having the right brands in the right locations.

As outlined in the Group's trading statement on 12 July 2019, the Board expects that the more recent challenging conditions are likely to continue during the second half of the year with continued weakness in consumer confidence in the light of political and economic uncertainty and further pressure on used car margins. There is also the possibility of new vehicle supply restrictions as real-life emissions regulations come into force in Q3. In addition, the retail cost inflation pressure experienced in H1 could continue to impact earnings during the second half of the year.

As a result of the above factors, the Board believes it is right to remain cautious as we enter the second half of the year. However, the Board's current outlook for underlying profit before tax for the full year remains unchanged.

Notwithstanding the short-term challenges of H1 and the uncertain outlook for the second half of the year, the Board continues to believe that over the longer term, the Group is extremely well positioned to take advantage of the many opportunities ahead as the sector continues to develop. The Group continues to make significant investments in upgrading its property portfolio and enhancing customer experience. The Group's balance sheet remains strong, underpinned by a valuable freehold property portfolio, committed and extended bank funding facilities and strong operational cash flow capability.

I would like to finish my review by thanking all of my colleagues at Lookers and our OEM brand partners for their hard work, commitment and dedication to the Group.

Phil White

Chairman

13 August 2019

Condensed Statement of Total Comprehensive Income

*Will not be recycled to profit and loss

**Details of the restatements as a result of the adoption of IFRS 16 are made in note 1 to the Financial Information

Condensed Statement of Financial Position

**Details of the restatements following the adoption of IFRS 16 are made in note 1 to the Financial Information. In addition, comparatives within the interim period ending 30 June 2018 have been restated to reflect the presentation of the RCF as non-current rather than current liabilities.

Condensed Statement of Changes in Equity

Condensed Statement of Cash Flows

*Details of the restatement following the adoption of IFRS 16 are made in note 1 to the Financial Information. In addition, comparatives within the interim period ending 30 June 2018 have been restated to reflect the presentation of the RCF as non-current rather than current liabilities.

Notes to the Financial Information

1. General information

Lookers plc is a public limited company incorporated in the United Kingdom under the Companies Act 2006, with registered number 111876 in England and Wales and a registered office of Lookers House, 3 Etchells Road, West Timperley, Altrincham, WA14 5XS.

The financial information for the six months ended 30 June 2019 and 30 June 2018 is unaudited. The financial information for the year ending 31 December 2018 has been based on the audited financial statements for that year.

The information for the year ended 31 December 2018 and the Interim Report for the period ended 30 June 2019 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies and was filed on 15 July 2019. The auditor's report on those accounts was not qualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain statements under section 498 (2) or (3) of the Companies Act 2006.

Accounting policies

The annual financial statements of Lookers plc are prepared in accordance with IFRSs as adopted by the European Union. The set of condensed financial statements included in this Interim Report has been prepared in accordance with International Accounting Standards 34 'Interim Financial Reporting', as adopted by the European Union. Save for the implementation of IFRS 16 'Leases' which is discussed further below, the same accounting policies, presentation and methods of computation are followed in the Interim Report as applied in the Group's latest annual audited financial statements.

Going concern

This financial information has been prepared on a going concern basis which the Directors believe to be appropriate. This conclusion is based on, amongst other matters, a review of the Group's financial projections together with a review of the cash and committed borrowing facilities available to the Group.

At 30 June 2019 the banking facilities included a revolving credit facility of up to £250.0m, with a further £50.0m available for future acquisitions. These facilities are not due for renewal until March 2022.

At 30 June 2019 the Group had Net debt of £73.9m.

Alternative Performance Measures

The Group uses a number of Alternative Performance Measures (APMs) which are non-IFRS measures in order to monitor the performance of its operations. The Group makes certain adjustments to statutory profit measures in order to derive many of these APM's. The Group's policy is to exclude items that are considered to be significant in nature and/or quantum. The Group believes these APM's provide useful historical financial information to assist investors and other stakeholders to evaluate the performance of the business and are measures commonly used by certain investors for evaluating the performance of the Group.

The key APM's used by the group include like-for-like sales, gross profit margin, underlying operating profit, underlying profit before tax and net debt. Each of the APM's and others used by the Group are set out in the Glossary including explanations of how they are calculated and how they can be reconciled to a statutory measure where relevant.

IFRS 16 

The Group has applied IFRS 16 for the first time in the Period. IFRS 16 introduces new or amended requirements with respect to lease accounting. It introduces significant changes to the lessee accounting by removing the distinction between operating and finance leases and requiring the recognition of a right-of-use asset and a lease liability at the lease commencement for all leases, except for short-term leases and leases of low value assets. 

The Group has elected to apply the full retrospective implementation approach with restatement of the comparative information. The date of initial application is 1 January 2017. IFRS 16 changes how the Group accounts for leases previously classified as operating leases under IAS 17, which were off-balance-sheet. Applying IFRS 16, for all leases (except as noted below), the Group: 

a) recognises right-of-use assets and lease liabilities in the Statement of Financial Position, initially measured at the
present value of future lease payments;

b) recognises depreciation of right-of-use assets and interest on lease liabilities in the Statement of Total Comprehensive
Income; and

c) separates the total amount of cash paid into a principal portion (presented within financing activities) and interest (presented within operating activities) in the Statement of Cash Flows.

Lease incentives (e.g. free rent period) are recognised as part of the measurement of the right-of-use assets and lease liabilities whereas under IAS 17 they resulted in the recognition of a lease incentive liability, amortised as a reduction of rental expense on a straight-line basis. Under IFRS 16, right-of-use assets are tested for impairment in accordance with IAS 36 Impairment of Assets. This replaces the previous requirement to recognise a provision for onerous lease contracts. For short‑term leases (lease term of 12 months or less) and leases of low-value assets (such as personal computers and office furniture), the Group has opted to recognise a lease expense on a straight-line basis as permitted by IFRS 16. This expense is presented within net operating expenses in the Statement of Total Comprehensive Income.

The Group assesses whether a contract is or contains a lease, at inception of a contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. The weighted average incremental borrowing rate applied to lease liabilities is 5.40%.

Lease payments included in the measurement of the lease liability comprise:

·; fixed lease payments (including in-substance fixed payments), less any lease incentives;

·; variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

·; the amount expected to be payable by the lessee under residual value guarantees;

·; the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and

·; payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The lease liability is presented as a separate line in the Statement of Financial Position. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

·; the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

·; the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).

·; a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

The Group did not make any such adjustments during the periods presented.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under IAS 37. The costs are included in the related right-of-use asset, unless those costs are incurred to produce inventories.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease. The right-of-use assets are presented as a separate line in the Statement of Financial Position. The Group applies IAS 36 Impairment of Assets to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss.

A reconciliation of total operating lease commitments to the IFRS 16 lease liability at 1 January 2019 is as follows:

In addition to the recognition of right-of-use assets, lease liabilities and adjustments to net operating expenses for operating lease costs and depreciation coupled with adjustments to finance expenses, the gains on property disposals arising from sale and leaseback transactions have been remeasured under the new standard. The following reconciliations detail the impact of the adoption of IFRS 16 on the previously reported Statement of Total Comprehensive Income, the Statement of Financial Position and the Statement of Cash Flows for the period ending 30 June 2018 and year ending 31 December 2018. 

*Amortisation of intangible assets have been restated to be included in the underlying financial performance.

*Amortisation of intangible assets have been restated to be included in the underlying financial performance.

\* The comparatives within the interim period ending 30 June 2018 have been restated to reflect the presentation of the RCF as non-current rather than current liabilities.

\* The comparatives within the interim period ending 30 June 2018 have been restated to reflect the presentation of the RCF as non-current rather than current liabilities.

2. Segmental reporting

In preparing the interim financial information the Directors have elected to amend the presentation of the segmental information to better reflect the Group's revenue streams, gross profit contributions and the single-segment nature of
the business' operations. The "unallocated" segment that had been reported in previous interim and annual financial statements has been combined with the motor division for the period ending 30 June 2019. Given that this segmental split is equivalent to the Group's Statement of Total Comprehensive Income, no further presentation has been made. In addition, the disclosure has been updated to reflect the revenue contributions from Leasing/other sales which were previously subsumed within aftersales in the comparative reporting periods.

3. Non-underlying items

The following details items of income and expenditure that the Group has classified as non-underlying in its statement of total comprehensive income.

4. Net interest