Lookers Group to continue impressive UK growth strategy

Lookers Group to continue impressive UK growth strategy

Manchester based Lookers Plc (Lookers), one of the UK's leading automotive retailers and distributors, announced today that it has secured an extension to its banking facilities that will enable it to continue its acquisition led growth strategy.

Supporting corporates

01 December 2011

The £115m tailored facility has been provided by a banking consortium led by Royal Bank of Scotland Corporate & Institutional Banking (RBS CIB), with Barclays Corporate, Handelsbanken Capital Markets, Svenska Handelsbanken AB (publ), HSBC, Lloyds Bank Corporate Markets, Yorkshire Bank and RBS as Joint Mandated Lead Arrangers. The banks were advised by Amanda Gray and Richard Oman of Addleshaws Manchester office.

Lookers' motor division consists of 119 franchise dealerships across the UK, representing 33 car marques across 71 sites, and it also owns a market leading independent parts division. The Group delivered strong results for the first six months of the year - sales of new retail cars were 5.4% ahead of the UK market, used car volumes were up by 5% on a like for like basis and the parts division produced another record trading performance - enabling it to announce a significantly increased dividend payment.

Lookers, which was founded in 1908 and originally operated primarily as a Ford dealer, made its first major acquisition in the 1960's and has since expanded to encompass dealerships all over the UK. In March it acquired Get Motoring UK Limited, which trades as Vehicle Rental Services (VRS) and supplies vehicles on short term leases to car rental operators in the UK.

The parts division is a key differentiator between Lookers and its competitors in the retail motor sector because its high quality earnings stream is subject to fewer fluctuations than the demand for new and used cars. The group has identified the car parts business as a key growth target and the new financing contains a flexible £30m ‘accordion' component that management can access if strategic acquisition opportunities arise in either the motor or parts divisions.

Robin Gregson, finance director at Lookers , said: "Lookers are confident that we can continue to grow the business, deliver satisfactory financial results and use our balance sheet strength to pursue strategic growth opportunities as and when they arise. We benefit from working with a banking group that understands and supports our business and the new funding facilities provided by the RBS led syndicate will give us the financial flexibility to develop the company even further."

Speaking on behalf of the banking group, Paul Thomas, relationship director, RBS CIB, said: "The syndicate is delighted to continue its relationship with Lookers and to provide a funding package that will enable this fantastic Manchester-based company to pursue its strategic ambitions. We devised a bespoke funding structure that is both flexible and efficient and look forward to working with the Lookers management team as it seeks out new opportunities."

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