Lookers sees 14% rise in new car sales

LOOKERS, the Vauxhall and Rover dealer, said yesterday that sales of new cars since September were running 14 per cent ahead of a year ago. 'We were nearly suicidal a few months ago,' Allan Marston, finance director, said, 'but spring is on its way.'

Good trading news compensated for a 44 per cent fall in pre- tax profits for the year to September, from pounds 3.21m to pounds 1.81m. Lookers shares added 2p to 104p.

Margins had been especially tight in the final two months of the financial year as stocks were built up to meet an expected increase in demand.

Turnover slipped 7 per cent to pounds 333m ( pounds 360m) and earnings were more than halved to 0.9p (2.1p) but the final dividend was maintained at 4.2p to give an unchanged total of 6.2p.

Lookers also announced the sale of 51 per cent of its contract hire business, LPM, to Woodchester, a 29 per cent-shareholder. The deal takes LPM's debt off Lookers' balance sheet, reducing gearing from nearly 100 per cent to about 50 per cent.

Mr Marston said the division, which last year earned pre-tax profits of pounds 737,000, could now be expanded with Woodchester's financial backing. Lookers had said that it might have to wind down the business to take the strain off its balance sheet.

Ken Martindale, chairman, yesterday afternoon put in a call to T Cowie, a 10.9 per cent shareholder, to warn its chief executive, Gordon Hodgson, about the tie- up. Cowie, which is keen to expand, had been named as a possible buyer of Lookers.