LOOK.L Regulatory News (LOOK)

22 August 2023

Lookers plc ("Lookers" or the "Group")

Unaudited Interim Results for the six months ended 30 June 2023

Good trading performance despite macroeconomic headwinds

Lookers plc, one of the leading UK integrated automotive retail and service groups, today announces its unaudited interim results for the six months ended 30 June 2023 ("H1" or "the period").

Highlights

· Revenue up 8.0% at £2,419m (H1 2022 (restated): £2,240m) with all revenue streams delivering growth and reflecting improved vehicle supply.

· Continued focus on cost control with underlying profit before tax* broadly in line with last year, despite £6.7m of additional interest expense.

· Like-for-like new unit growth +16.1%, used unit growth +3.5%, aftersales revenues +13.5%.

· Cash generation continues to be strong with net funds of £101.4m as at 30 June 2023 (30 June 2022: £78.5m; 31 December 2022: £66.5m).

· Interim dividend of 1.00p previously declared 17 August 2023, payable on 8 September 2023.

· An all-cash offer of 130p per share from Global Auto Holdings Limited, has been unanimously recommended by the Lookers Board of Directors. The offer is to be effected by a Scheme of Arrangement and meetings to approve the offer have been convened for 5 September 2023.

Financial Summary

* Underlying profit before tax is profit before tax and non-underlying items. Underlying earnings per share is the earnings per share after tax and before non-underlying items (see Note 5).

** Cash and cash equivalents less bank loans and overdrafts, excluding stocking loans, vehicle rental liabilities and lease liabilities under IFRS 16 (see Note 7).

Mark Raban, Chief Executive Officer, said:

"Against significant macroeconomic headwinds the Group has once again delivered a good trading performance. I would like to thank the entire Lookers team for their amazing contribution and dedication to the company."

"The Board unanimously recommends the cash offer for Lookers by Global Auto Holdings Limited at 130p per share, which represents a premium of approximately 61%[1]. The Board believes that the offer is in the best interests of all shareholders and provides an opportunity to crystallise, in cash, the value of their investments."

Enquiries:

Lookers

Mark Raban, Chief Executive Officer 0161 291 0043

Oliver Laird, Chief Financial Officer

MHP Communications

Tim Rowntree / Charles Hirst 020 3128 8193

Lookers@mhpgroup.com

About Lookers plc (www.lookersplc.com)

The Group's principal activities are the sale of new and used cars, commercial vehicles and aftersales activities. The Group's businesses have a total of 148 franchised car and commercial vehicle dealerships representing 35 manufacturers, operating across the UK and Republic of Ireland. 

The Company is registered in England at Lookers House, 3 Etchells Road, West Timperley, Altrincham WA14 5XS. Company registration number 00111876. LEI number 213800TSB8PJEACDAV33

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.

All statements other than statements of historical fact included in this document, including, without limitation, those regarding the financial condition, results, operations and businesses of Lookers plc and its strategy, plans and objectives and the markets and economies in which it operates, are forward-looking statements. Such forward-looking 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. Such statements should be treated with caution due to the inherent uncertainties, known and unknown risks, and other important factors underlying any forward-looking information which could cause the actual results, performance or achievements of Lookers or the markets and economies in which it operates to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Lookers and its Directors accept no liability to third parties in respect of this report save as would arise under English law.

INTERIM MANAGEMENT REPORT

The Lookers Directors have recommended an all-cash offer of 130p per share from Global Auto Holdings Limited for the issued and to be issued share capital of Lookers plc. It is intended that the offer be implemented by way of a Court-sanctioned scheme of arrangement (the "Scheme") under Part 26 of the Companies Act. To become effective, among other things, the Scheme requires both approval from 75% of Lookers shareholders who are present and vote (either in person or by proxy), and receipt of approval from the FCA. For further details on the offer please see the "Publication And Posting Of Scheme Document" announcement published on our corporate website on 14 August 2023 at 07:00 (www.lookersplc.com/investors/regulatory-news).

We delivered a good financial performance for the first half of 2023, with underlying profits broadly in line with the comparative period in 2022. We continued to deliver against our strategic priorities which has allowed us to harness our market position and enhance our OEM brand partner relationships. The first half result is strong considering both the uplift in the Bank of England base rates which have materially increased finance costs, and the continued inflationary pressures on our cost bases across the business.

Update on strategic priorities

The Board continues to believe that our business model and the advancement of our strategic priorities place the Group at the forefront of integrated automotive retail in the UK. The diversity of our OEM relationships and the range of services we offer has supported the strong performance in H1. We provide an update on the progress against each of our strategic priorities below:

Operational optimisation:

· Increase in used finance penetration to 50.6% (H1 2022: 48.0%).

· The "Lookers Service Core Process" has been successfully piloted in H1 and will be rolled out more widely in H2 2023.

· Strong cost control with underlying cost growth restricted to 2.6%.

· Developed procurement team and processes resulting in robust underlying cost control.

· Excellent working capital management delivering c.£43.0m of cash flow benefit.

Leveraging technology and digitisation:

· Rigorous Sales Transformation user acceptance testing underway to ensure rollout commences in Q4 2023 and the project is delivered across the Group by Q2 2024.

· The customer journey will be streamlined with customers being able to start, pause, and continue the sales journey either in person, by telephone, or online. Reports are being developed to fully utilise the additional data that will be captured, with significant productivity improvements anticipated.

Expanding OEM relationships:

· Lotus is now operational in Belfast.

· Three ORA sites are now open in Wolverhampton, Belfast, and Braintree.

· Three sites agreed with Electric Brands to retail their XBUS and Evetta brands.

· Acquired the business and assets of Waterhouse Cars Limited, extending our Volvo footprint to four dealerships.

· Successfully deployed agency model across our Mercedes-Benz division in January and more recently at all our Volvo dealerships. Continuing work to harmonise the agency journey for both our customers and colleagues as advancements in the process become available.

Increasing used vehicle penetration:

· Physical building works on the Lookers CarHub have now commenced with completion expected in Q4 2023.

· Actively engaged in the identification of additional sites that will follow the Lookers CarHub blueprint.

Developing aftersales revenues:

· We now have 39 fixed cosmetic repair facilities operational and 22 dedicated vans on the road; we are making good progress in ensuring all our locations have the required cosmetic repair facilities to capitalise on the opportunity.

· Introduced new competitive service plans and improved the visibility in our reporting.

· Set up Battery Competence Centres on behalf of certain OEMs ensuring we are best placed to support our customers.

Leveraging corporate leasing and fleet capabilities:

· The restructuring of our fleet business in 2022 is showing positive results with improved sales efficiency. The centralisation of divisional salespeople and amended pay plans have also significantly improved collaboration with the leasing businesses through referrals.

· Acquired and integrated Fourways Vehicle Solutions Limited in the period. Operational platforms have been aligned with synergies already delivered.

Operating Review

Overview

H1 2023 Segmental analysis of revenue and gross profit:

New vehicles

The sale of new vehicles represented 41.0% (H1 2022: 39.1%) of total revenue and 31.8% (H1 2022: 29.8%) of total gross profit. LFL total car unit sales volume increased by 8.5% when compared to H1 2022.

There have been 11 consecutive months of growth in the new car market as production constraints continue to ease across the industry following the supply chain shortages that were prevalent in recent years. In H1 there were c.950,000 new cars registered in the UK, an increase of 18.4% versus last year (Retail +1.7%, Fleet +37.5%).

Demand for new vehicles remains resolute, with the Group carrying a retail order bank of 17,206 vehicles (31 December 2022: 17,321) into the second half of the year.

The electric vehicle (EV) market continued to expand in the period, with EVs now representing 16.1% (H1 2022: 14.4%) of UK new car registrations. Our volume of EVs sold has increased by 27.3%. EVs represent 20.8% of our new vehicles sold, outperforming the market by 470 BPS.

Used vehicles

The sale of used vehicles represented 46.9% (H1 2022: 48.9%) of total revenue and 28.5% (H1 2022: 31.3%) of total gross profit. Like-for-like unit sales increased by 3.5%. Lookers' increase in unit sales volumes follows the same upward trend of the UK used car market which rose by 4.1% in H1.

The UK used car market saw its best start to a year since 2020 as the increased supply in the new car market drove growth in used car availability. The increased supply to the used market has resulted in used car values softening and the gross margin reducing by 70 BPS to 6.6%, when compared to H1 2022.

The gross profit per unit has fallen to c.£1,900, compared to c.£2,100 in H1 2022.

Aftersales

Aftersales represented 9.4% (H1 2022: 9.4%) of total revenue and 34.9% (H1 2022: 34.6%) of total gross profit.

In H1 like-for-like aftersales revenue growth was 13.5% which drove increased gross profit of £4.8m. Gross margin was 40.3% (H1 2022: 41.8%). Gross margin eroded by necessary inflationary increases to technicians pay and a shift in revenue mix, with lower margin parts sales increasing at a greater rate than revenue from service labour and bodyshop.

We have maintained our focus on operational optimisation initiatives around customer conversion, IT platforms, customer propositions, staff retention, and digitising the customer aftersales journey. We also continued to roll out our cosmetic repair facilities, resulting in bodyshop revenue and gross profits increasing.

H1 2023 Financial Review

Revenue

H1 revenue of £2,419m was 8.0% higher than the comparative period (H1 2022 (restated): £2,240m). Like-for-like revenue increased by 8.5% with increased revenue from fleet, used, and aftersales being partially offset by reduced new retail vehicle revenue.

Gross profit

Gross profit increased by 4.0% to £294.2m (H1 2022: £282.8m). Gross profit margin at 12.2% was marginally behind the same period last year by 40 BPS. The increase in absolute gross profit was driven by the volume growth of fleet and aftersales. However, the margin percentage was slightly eroded by reductions in used and aftersales.

Operating expenses

Underlying net operating expenses of £229.8m (H1 2022: £224.0m) were 2.6% above the comparative period. This represents a significant reduction against the uplift observed in H1 2022, with this improvement driven by inflationary pressures reducing, and strong cost management (strengthened procurement team).

Non-underlying items

The Group recorded a net non-underlying charge of £5.7m (H1 2022: net credit £2.7m). The largest element of this is professional services costs incurred in relation to the potential transaction (£3.6m). We have also incurred £1.5m of non-underlying cost relating to the implementation of the Sales Transformation project.

Net finance costs

Net finance costs were higher than the comparative period at £18.3m (H1 2022: £11.6m). This has been driven by increases to the Bank of England base rate, which has been increased in 14 consecutive periods by the Monetary Policy Committee.

Taxation

The Group's tax charge was £10.0m (H1 2022: £9.5m), an effective tax rate of 24.8% (H1 2022: 19.0%).

The increase in the effective rate is predominantly due to the increase in UK corporation tax rate from 19% to 25% on 1 April 2023.

Earnings per share (EPS)

Underlying EPS decreased by 6.7% to 9.02p per share (H1 2022: 9.67p per share). Basic EPS decreased by 23.2% to 7.92p per share (H1 2022: 10.31p per share).

Dividend

The Board has declared an interim dividend of 1.00p per ordinary share which will be paid on 8 September 2023 to shareholders on the register at the close of business on 25 August 2023.

A dividend of £7.7m relating to the 2022 financial year was paid in June 2023.

Cash flow and net debt

Throughout H1 the Group maintained a strong focus on operational cash flow. The net cash inflow from operating activities in H1 was £62.8m (H1 2022: £80.2m), largely as a result of the strong trading performance and ongoing working capital focus. We expect some of the working capital benefit to unwind into H2. The Group was also able to return £8.1m to shareholders as part of the share buyback programme. At the balance sheet date stocking loans totalled £231.3m (31 December 2022: £247.2m), equivalent to 75% of goods for resale (31 December 2021: 82%). Property, plant and equipment capital expenditure totalled £14.4m (2022: £8.0m).

Net funds at 30 June 2022 were £101.4m (30 June 2022: £78.5m; 31 December 2022: £66.5m).

Financing

The RCF facility which was renegotiated and extended in June 2022 remains undrawn at 30 June 2023. The facility is subject to quarterly covenant tests on leverage and interest cover.

Pension schemes

The Group's actuary has assessed the IAS 19 valuation of both the Lookers Pension Plan and Benfield Pension Plan as at 30 June 2023.

At 30 June 2023, the IAS 19 pension valuation showed a total deficit of £16.5m (30 June 2022: £24.3m; 31 December 2022: £23.5m). The reduction in the deficit is predominately due to the Group's continued contributions to the schemes. Over the period, lower than expected returns were achieved on scheme assets, but this was mostly offset by the impact of an increased net discount rate on the scheme liabilities. We are pleased to announce that the triennial review valuation for the Lookers Pension Plan, including the funding strategy, was agreed during the period.

Risks and uncertainties

As with any business, there are a number of potential risks and uncertainties which could have a material impact on the Group's future performance and could cause actual results to differ materially from both expected and historical results. The Board believes the wider risks and uncertainties to be materially consistent with those described on pages 39 to 43 in the 2022 Annual Report and Accounts.

In addition, the Board continues to manage and robustly monitor the change agenda that supports the implementation of the Group's strategic priorities. An update on these priorities is provided in the Strategy Update earlier in this document.

We continue to be mindful of a number of external factors that are subject to ongoing close monitoring. These include inflationary pressures and interest rate rises that can impact the Group's operating costs and potentially affect consumer confidence.

Summary and outlook

We are encouraged by our good H1 performance, particularly the resilience of the Group in the face of rapidly increasing interest rates and persistent cost pressures. We maintain a strong new vehicle order bank moving into the second half of 2023 but remain cognisant of continuing macroeconomic pressures.

The Board continues to believe that our business model and the advancement of our strategic priorities place the Group at the forefront of integrated automotive retail in the UK. We expect inflationary cost pressures to continue and that the Bank of England base rate will stabilise in the near future. However, the Board are confident that the business is well placed to respond to the continued challenging trading environment and maximise the strategic change opportunities ahead.

The Board unanimously recommends the cash offer for Lookers by Global Auto Holdings Limited at 130p per share, which represents a premium of approximately 61%[2]. The Board believes that the offer is in the best interests of all shareholders and provides an opportunity to crystallise, in cash, the value of their investments.

Mark Raban

Chief Executive Officer

21 August 2023

INDEPENDENT REVIEW REPORT TO Lookers Plc

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2023 is not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2023 which comprises the Condensed Consolidated Income Statement, Condensed Consolidated Statement of Comprehensive Income, Condensed Consolidated Statement of Financial Position, Condensed Consolidated Statement of Changes in Equity, Condensed Consolidated Statement of Cash Flows and the notes to the interim results.

Basis for conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" ("ISRE (UK) 2410"). A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

As disclosed in the basis of preparation, the annual financial statements of the group are prepared in accordance with UK adopted international accounting standards. The condensed set of financial statements included in this half-yearly financial report have been prepared in accordance with UK adopted International Accounting Standard 34, "Interim Financial Reporting".

Material uncertainty relating to going concern

We draw attention to the matter disclosed in the basis of preparation section of this report, which indicates that there is some doubt as to whether the Group will continue to operate in its current form following the receipt of a cash offer made by Global Auto Holdings Limited.

As stated in the basis of preparation section, these conditions indicate that a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern in its current form. Our opinion is not modified in respect of this matter.

Based on our review procedures, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the interim report is appropriate.

Our responsibilities, and the responsibilities of the directors, with respect to going concern are described in the relevant sections of this report. This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410, however future events or conditions may cause the group to cease to continue as a going concern.

Responsibilities of directors

The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

In preparing the half-yearly financial report, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the review of the financial information

In reviewing the half-yearly report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

Use of our report

Our report has been prepared in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

BDO LLP

Chartered Accountants

Manchester, UK

21 August 2023

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

Condensed Consolidated Statement of Total Comprehensive Income

Condensed Consolidated Statement of Financial Position

Condensed Consolidated Statement of Changes in Equity

Condensed Consolidated Statement of Cash Flow

Notes to the Financial Information

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.

Basis of preparation

These condensed consolidated interim financial statements for the six months to 30 June 2023 have been prepared in accordance with IAS 34 'Interim financial reporting' and also in accordance with the measurement and recognition principles of UK adopted international accounting standards. They do not include all of the information required for full annual financial statements and should be read in conjunction with the 2022 Annual Report and Accounts, which were prepared in accordance with UK Adopted International Accounting Standards.

These condensed consolidated interim financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2022 were approved by the Board of Directors on 4 April 2023 and have been filed with the Registrar of Companies. The report of the auditors on those accounts was unqualified. It did not contain any statement under section 498 of the Companies Act 2006.

The financial information for the periods ended 30 June 2023 and 30 June 2022 is unaudited but has been externally reviewed by BDO. The financial information for the year ended 31 December 2022 has been based on the audited financial statements for that year. 

Accounting policies

The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2022, as described in the 2022 Annual Report & Accounts. Corporation tax in the interim periods is accrued using the estimated tax rate that is expected be applicable to total annual earnings.

Critical accounting estimates and judgements

The preparation of interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2022. There have been no material revisions to either the nature or amount of estimates reported in prior periods. The Group has used up to date financial forecasts in considering its ability to continue as a going concern, and the carrying value of its goodwill balance.

Going concern

At 30 June 2023 the Group is in a net current liabilities position of £8.2m (31 December 2022: £8.4m, 30 June 2022: £42.5m). The Group has considerable financial resources together with long-standing relationships with OEMs and a good reputation within the motor-trade industry. In their consideration of going concern, the Board have considered the future prospects and performance of the Group, considering the Group's cash and liquidity position, current performance and outlook. The latter was subjected to various sensitivities and stress testing which assessed the potential future downside risks including, but not limited to: worsening supply restrictions caused by macro-economic factors, reduced consumer demand due to the cost of living crisis, and increases to the Group's cost base due to inflationary pressures.

The Group's revolving credit facility provides £100m of credit and expires on 30 September 2025. The facility is subject to quarterly covenant tests on leverage and interest cover. At 30 June 2023 £Nil (31 December 2022: £Nil, 30 June 2022: £Nil) was drawn down against this facility, giving the Group significant liquidity.

In view of the various sensitivities, additional stress testing, strong cash holding, and significant RCF headroom, the Board concludes that the Group has sufficient liquidity for at least 12 months from the date of this announcement and therefore that preparing the accounts on the basis of going concern is appropriate.

Material uncertainty in relation to going concern

As set out in the post balance sheet events disclosure, the Group is the subject of an all-cash offer from Global Auto Holdings Limited (the "Offeror") that, if successful, is expected to complete in H2 2023. The Directors note the intentions of the Offeror as set out in the Scheme circular, however while they do not have any reason to believe that the Offeror would not continue to support the Group or would materially change its activities in the next 12 months, they are not party to the detailed intentions of the acquirer. Although this does not change the Directors' conclusion as to the appropriateness of preparing the financial statements of the Group on a going concern basis, it is considered, on the assumption that the deal has completed, to create a material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern. Accordingly, the financial statements do not include the adjustments that would result if the Group were unable to continue as a going concern.

Alternative Performance Measures

The Group uses a number of Alternative Performance Measures (APMs) which are non-IFRS measures in establishing their financial performance. The Group believes the APMs 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. APMs should be considered in addition to IFRS measures and are not intended to be a substitute for IFRS measurements. 

More details of the APMs and a reconciliation of the IFRS measures used in the Interim Report to those APMs used for KPI monitoring are including in Note 12.

Like-for-like is the collection of dealerships and other trading businesses that have both a full period of trading activity in the current and prior periods.

1. Segmental reporting

2. Non-underlying items

Non-underlying items relate to (costs) or incomes which are not incurred in the normal course of business or due to their size, nature and irregularity are not included in the assessment of financial performance in order to reflect management's view of the core-trading performance of the Group.

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

1 - In March 2022 the Group completed the sale and leaseback of the VW dealership in Battersea. The net gain on sale has been deemed non-underlying by its size and nature.

2 - Property disposals relate to the net gains on the sale of a number of freehold and leasehold properties during the current period and prior year. These items have been deemed non-underlying by nature.

3 - During the prior year a number of sites were exited as part of Group-wide restructuring. This has continued into the current period where we have closed or announced our intention to close one site (FY 2022: six sites). Items include site closure costs, restructuring costs, and impairment losses. These items have been deemed non-underlying by irregularity.

4 - In 2020 we classified a site as an asset held for sale and at this point it was impaired in line with IAS 36. In 2022 we secured a new franchise for this site and it is due to re-open in 2023, therefore the value in use significantly increased and we reversed the impairment. Both the original impairment and subsequent reversal have been included within non-underlying items.

5 - In the prior year we have commenced a Sales transformation project which has continued throughout the current period. Costs incurred include external and internal incremental resource required to implement the new sales system. These items are considered non-underlying due to their irregularity.

6 - Professional fees incurred in connection with the all-cash offer from Global Auto Holdings Limited for the issued and to be issued share capital of Lookers plc. As detailed in the Scheme Document additional fees are expected to be incurred in the second half of 2023. These costs have been considered non-underlying due to their size and irregularity.

The net cash flow from operating activities associated with non-underlying items is an outflow of £0.8m (H1 2022: inflow of £29.3m, FY 2022: inflow of £25.1m).

3. Dividends

Following approval at the Annual General Meeting a final dividend of £7.7m for the year ended 31 December 2022 was paid in June 2023 and represented a payment of 2.0p per ordinary share in issue at the time. An interim dividend of 1.0p per ordinary share has been declared by the Board but not recorded as a financial liability in these interim statements. The dividend will be paid on 8 September 2023 to those shareholders on the register on 25 August 2023. The shares will go ex-dividend on 24 August 2023 and the last date for elections to be made under the dividend reinvestment plan is 25 August 2023.

4. Finance costs

5. Earnings per share

6. Assets held for sale

All items included in the analysis above relate to properties held by the Group and have been transferred into assets held for sale following the cessation of trade at certain dealerships and the subsequent commencement of procedures to dispose of these vacant properties from the Group's portfolio. Properties held within assets held for sale are being actively marketed for disposal and there is an expectation that such properties will be disposed of within 12 months of the balance sheet date. Where necessary, provision for impairment to bring the assets' carrying value in line with their estimated fair value less costs of disposal has been recorded whilst the assets were held within property, plant and equipment and prior to their subsequent transfer into assets held for sale.

During the period the total carrying amount disposed from held for sale amounted to £1.1m (H1 2022: £1.3m, FY 2022: £3.5m). Total proceeds received amounted to £1.8m (H1 2022: £1.2m, FY 2022: £4.2m) resulting in a profit on property disposals of £0.7m (H1 2022: loss of £0.1m, FY 2022: gain of £0.7m).

7. Financial Instruments

Non-cash movements in relation to lease liabilities relate to the recognition and de-recognition of lease liabilities and accrued and repaid interest. Non-cash movements in relation to the Group's RCF is the reclassification of unamortised debt issue costs to prepayments. 

8. Business combinations

On 2 March 2023, Lookers plc acquired 100% of the share capital of Fourways Vehicle Solutions Limited, a leading vehicle hire and brokerage business. The acquisition is part of Lookers key strategic priorities to grow its corporate leasing, fleet, and rental capabilities.

On 28 April 2023, Lookers plc acquired the business and assets of Waterhouse Car Limited, which operated a Volvo dealership in Chelmsford, extending the Group's Volvo footprint to four dealerships.

The combined assets and liabilities recognised as a result of the acquisitions are as follows:

The goodwill is attributable to the profitability of the acquired business. None of the goodwill recognised is expected to be deductible for income tax purposes.

The fair value of the acquired trade and other receivables is £0.8m with a gross contractual amount of £0.8m. The best estimate at the acquisition dates of the contractual cash flows not to be collected was £Nil.

No contingent liabilities have been recognised as a result of the acquisitions.

Acquisition related costs included within the Lookers plc statement of total consolidated comprehensive income for the period ended 30 June 2023 amount to £0.1m.

The combined businesses acquired contributed £4.3m to revenue and £0.2m to the Group's profit for the period between the dates of acquisition and the 30 June 2023. If the acquisition of the businesses had been completed on 1 January 2023, contribution to Group revenues for the period would have been £10.6m and contribution to Group profit would have been £0.4m.

There were no acquisitions in the year ended 31 December 2022.

9. Subsequent events

On 20 June 2023, the boards of directors of Global Auto Holdings Limited (the "Offeror") and Lookers announced the recommended proposed cash offer by the Offeror for the entire issued and to be issued share capital of Lookers which was to be effected by way of a scheme arrangement under Part 26 of the Companies Act 2006.

On 27 July 2023, the boards of directors of the Offeror and Lookers announced that they had reached agreement on the terms of an increased recommended cash offer by the Offeror for the entire issued and to be issued share capital of Lookers at a price of 130 pence per Lookers Share and a switch from a Scheme to a takeover offer.

On 4 August 2023, it was announced that the increased offer would revert to being implemented by way of a scheme arrangement under Part 26 of the Companies Act 2006.

Scheme documentation has been issued to the shareholders, and a Court Meeting and General Meeting to vote on the scheme will be held on 5 September 2023.

10. Related parties

There have been no material changes to the Group's principal subsidiaries as listed in the 2022 Annual Report & Accounts except for the acquisition of Fourways Vehicle Solutions Limited as detailed in Note 8.

There have been no related party transactions in the period (H1 2022: none).

11. Condensed Consolidated Statement of Total Comprehensive Income (restated)