Lookers

Car dealership firm Lookers' reckons that the sector is set for quite a bit more consolidation over the next few years. Chairman Fred Maguire opines that 'six majors will dominate the market' within five years. At the moment, there are three large players, with around a dozen smaller pretenders, one of which is Lookers. Maguire says that he is looking at making a merger 'within three to five years' with a company of a similar size (turnover of around £800m). About the existing business, Maguire bullishly proclaims Lookers' 'flexibility' and focus on customer service. Results haven't been bad either, with pre-tax profits rising 55% to £10.1m last year, on turnover up 23% to £718m. So far this year, sales are up 30%, compared to market growth of 7%. Analysts expect between £11.7m and £12.7m of pre-tax profits, for earnings per share of 21p to 25p. Still good value, despite a stunning share price performance over the past few years.

Sector: Automobiles & Parts

Companies: Lookers

Market cap: £64.4m

PE Forecast: 8.3

Share price: 190p

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