THE chief executive of Lookers, Andy Bruce, has said the car sales giant wants to acquire more dealerships in Scotland where the company has been recording rapid growth in sales.
Mr Bruce underlined Lookers’ enthusiasm for Scotland after the company’s success in the country helped it post record results amid buoyant trading conditions.
Lookers made an underlying profit of £43.1 million in the six months to 30 June, up seven per cent from £40.2m in the same period of 2014. Sales increased by nine per cent annually to £1.75bn.
Mr Bruce, who comes from Glasgow, said sales grew twice as fast in Scotland as other parts of the UK.
He noted Lookers sells many cars under brands like Audi, Jaguar and Land Rover in Scotland, through its Lomond and Taggarts operations. While Mr Bruce thinks the out-performance reflects a more upmarket mix of cars sold in the country compared with south of the border, the strong trading has left the company keen to expand its footprint in Scotland.
“We would be open to expand in Scotland if we could,” said Mr Bruce, who added that Lookers could use its strong balance sheet to support acquisitions.
Asked if it would be interested in buying in Scotland, he said: “We certainly would be if it’s the right proposition. Scotland has been a happy hunting ground for us.”
Mr Bruce said since Lookers moved into Scotland by acquiring Taggarts in Glasgow in 2003 the country has become what he described as a very meaningful part of the business.
Lookers has 15 dealerships in Scotland out of a total of 124. However, around 20 per cent of business is generated in the country.
Directors have been pleased with the results of the latest expansion move in Scotland, which involved opening a £3.5m Audi used car showroom and after sales service centre in Hamilton in July.
The ten workshop bays have been so busy the centre has introduced a night shift.
Lookers said the used car business represents a major opportunity, with scope to expand its share of a growing market.
Mr Bruce stressed Lookers expects the new car market to remain strong. The company said it has a healthy order book for September, when the latest number plates will be released.
Sales have been boosted by the availability of cheap credit. But Mr Bruce is not worried about the possibility of the Bank of England raising interest rate in coming months.
“Four out of five people who buy cars do so on credit but an interest rate rise of 0.25 per cent would mean three pounds per month on the typical finance deal we do,” said Mr Bruce.
He added: “As long as the economy stays in decent shape car sales will stay in decent shape.”
Mr Bruce predicted total UK new car sales may peak at around 2.7m a year, compared with 2.47m in 2014. He expects them to plateau at around 2.5m annually, in line with levels seen before the financial crisis of 2008 triggered a slow down in spending.
Signalling confidence, Manchester-based Lookers increased its interim dividend by 10 per cent, to 1.07p per share, from 0.97p.
It said its higher margin aftersales business continues to perform well.
Lookers increased new car sales volumes by four per cent compared to the first half last year. Used car sales increased by eight per cent.
The company said its higher margin aftersales business continues to perform well.
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