Morning all!
Lookers ( Lookers (LON:LOOK) ) – 105p – £418.5m – PER 7.57
Unaudited Results For The 6 Months To End June 2018 – In-line with expectations for the FY.
I still remain sceptical towards this sector (even though it’s quite cheap at present) and therefore remain Neutral.
As always, all comment most welcome!
My morning smallcap tweet:
Arena Events (LON:ARE), Premier Veterinary (LON:PVG), Boxhill Technologies (LON:BOX)
Arena Events Group (ARE) Placing of £20m at 60p, a 12% discount, to fund 2 acquisitions.
Premier Veterinary (PVG) 'Major' 3 yr contract in US for Premier Pet Care Plan. Trial in 15 locations for 6 months then rollout to all 100 pet surgeries if a success. The client is the fourth largest consolidator in the US.
Boxhill Technology (BOX) Remains suspended - looks like FY accounts wont be completed for months due to shenanigans at a subsidiary's bank. What a mess.
Having run some numbers on car dealers, here are my notes:
Allocation of capital seems to be an important part of a successful dealership. Lavinit has raised doubts about VTU (Vertu motrs) and Orangetree about the resulting margins and at LOOK (Lookers). Graham Neary praises PDG Pendragon's sale of US operations and buybacks. Sterling weakness seems a sector problem, but don't they either hedge or have cross border manufacture costs?
Share structure eliminates CAMB (Cambria) for me, too much in the hands of the owners and might elimnate CFYN (Caffyns) except that I have some.
Price to book is the redeeming factor at CFYN plus 9,5m of freehold property.
Since Brexit I have been in and out of several dealers with the best results from INCH (Inchape), buying twice just below 7 and selling just below 8. The international scope attracts me, they have dealerships in 25 countries. Their margins are much better than the others mentionned here. The July crash in a few sessions has therefore attracted my interest.
A comparaison with NYQ:AN. (Autonation) (USA) is favourable and both are on my list.
Incidentally this column has been going for about a year now. Light a birthday candle.
