Thursday, October 30, 2008
Lookers in Cost Cutting Review
"Ken Surgenor: "Trading conditions are currently very difficult and the outlook for the industry for the remainder of the year remains challenging.""
Job cuts, closures of marginal satellite dealerships and multi-franchises all form part of Lookers' strategy to ride out the recession.
The top10 AM100 dealer group informed shareholders this morning that it is focused on improving the performance of its franchised dealerships.
However it reassured investors the business is cash generative and has adequate banking facilities for the medium term.
The group suffered a decline in third quarter new car sales similar to the national drop of 19%, said its statement to the London Stock Exchange.
Dual franchising
But its aftersales businesses, which include the parts distributor FPS, have performed strongly, it saidAction being taken to improve the performance of its franchised dealerships include removing the fixed costs of marginal satellite operations and redirecting volume back to main hubs, reviewing dual franchising opportunities where the facilities are larger than the market opportunity, exiting underperforming businesses and reducing the cost base and investment in working capital.
Ken Surgenor, chief executive, said: "Trading conditions are currently very difficult and the outlook for the industry for the remainder of the year remains challenging."
DATED: 30.10.08
FEED: AM
