Investment summary

Three major motor dealership groups announcing trading updates on the same morning provided a consistent message – conditions are challenging, but profits are moving ahead as a result of management action to lift returns, especially in used cars and the aftermarket. We are not changing our Lookers profit estimates, although the figures are beginning to look a little conservative. We remain positive.

Last updated on 11/05/2012

Industry outlook

City sentiment towards the motor distribution sector remains cautious. Fears about current-year trading remain, overshadowing the action taken by retailers to build their downstream activities. SMMT forecasts suggest little change in new vehicle registrations, although the leading groups all appear to be gaining market share. Profits continue under pressure in the short term, but this provides acquisition opportunities for those with the necessary facilities.

Last updated on 23/04/2012