Auto Retail Agenda: 1 June 2020
31 May 2020
- SCOTLAND AND WALES RETAILER FRUSTRATION
- LOOKERS DEBT COULD SOON EXCEED VALUATION
- LOOKERS, PICADOR DEALERS CLOSE
- NEW MD FOR NISSAN WEST WAY
- AUTO TRADER REMOVES DISPLAY ADS
- FRANCE LAUNCHES EV INCENTIVES
- FLORIDA RETAILERS REPORT REVIVAL
- STOCKWATCH – Lookers rally
- COMING UP – Vertu full year results
- FURLOUGH EXTENSION: HOW IT WORKS
- EBAY BIDS PROVE POWER OF CLASSIFIEDS
- BLOG: Back to work
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Scotland and Wales retailer frustration
Retailers in Scotland and Wales are calling on their governments to immediately allow showrooms to reopen.
Nine Welsh retailers have written to the First Minister about “considerable harm” in remaining closed while English dealers across the border reopen from 1 June.
Signatories from the Welsh retail motor industry, which has a £3bn turnover and employs 20,000, were Days Motor Group, Griffin Mill Garages, Hutchings, Jeff White Motors, Mon Motors, Nathaniel Car Sales, Ron Skinner and Sons, Trade Centre Wales and White Dove Garages.
The Scottish Motor Trade Association has written to First Minister Nicola Sturgeon saying retailers “urgently need some opportunity to save the new and used car markets” and chief executive Sandy Burgess says English retailers now have an “unfair advantage”.
The Northern Ireland Executive last week announced retailers could reopen from 8 June.
Lookers debt could soon exceed valuation
Lookers shares are down 71% in a year, valuing the business at £97.9m, reports The Sunday Times. Debt could soon exceed the valuation: it had £65m of debt at the end of April and the cost of lockdown is estimated at £15m a month. A £250m credit facility expires in 2022 and the £68.9m pension deficit reported in 2018 is expected to grow.
The results of the FCA investigation, and Lookers’ 2019 accounts, are expected in mid-June, said a source. In May, it was confirmed Pendragon had approached Lookers about a merger.
Lookers, Picador dealers close
Two more retailers will not be reopening after lockdown. Picador Vauxhall in Lyndhurst is closing, with 12 staff asked to take voluntary redundancy or move to another branch. Lookers Ford in Frinton has closed and transferred operations to Colchester. Lookers bought the former Pollendine Motors business two years ago. Franchise director Colin Pybus said the decision was due to the “projected downturn in the market”.
New MD for Nissan West Way
Nissan veteran Jon Roberts has been appointed managing director of the company’s West Way dealer group. He starts today (1 June), replacing Tony Lewis who has now left the company.
Auto Trader removes display ads
Auto Trader has today (1 June) removed display advertising from its site, freeing up 25% more space to display retailer partner stock. On mobile, retailer adverts will be 40% larger and vehicle imagery 90% larger. The changes will increase the prominence of retailer adverts and “drive improved performance” said commercial product director Karolina Edwards-Smajda.
WORLD NEWS
France launches EV incentives
French consumers could get grants of up to £6,300 to buy electric vehicles as part of a £7.1bn rescue package for the car industry proposed by President Macron. Those who buy greener models could get up to £3,100. In return, Renault and PSA will commit more car production to France.
Florida retailers report revival
Retailers in Florida, which has 20 million residents, say customers are returning to showrooms to buy vehicles in the region’s first phase of lockdown lifting. “We are starting to rebound” said Galloway Ford president Robert Galloway. Coronavirus prevention measures include laminated spec sheets and showroom deep-cleaning four times a day.
STOCKWATCH
Closing prices on 29 May 2020 and weekly change
Lookers rallies with 37% rise
Auto Trader Group 558.2p (+37.2p / +7.1%)
Cambria 52.5p (+7.0p / +15.3%)
Caffyns 275.0p (-5.0p / -1.7%)
Halfords 183.2p (+17.2p / +10.3%)
Inchcape 500.5p (+43.1p / +9.4%)
Lookers 25.1p (+6.86p / +37.1%)
Marshall Motor Holdings 112.5p (+9.0p / +8.6%)
Motorpoint 251.0p (+39.0p / +18.3%)
Pendragon 8.21p (+0.43p / +5.5%)
Vertu 30.25p (+3.95p / +15.0%)
COMING UP
Wednesday, Vertu full year results
Thursday, May new car registrations
9 June, Radius Law distance sales webinar
MONEY MATTERS
Furlough extension: how it works
Chancellor Rishi Sunak has announced the furlough scheme will finish at the end of October. There will be no change to the scheme in June and July; in August, employers will pay National Insurance and pension, but the 80% rate from the taxpayer will remain.
This falls to 70% in September, with employers contributing 10%. In October, the taxpayer rate falls again to 60%, with employers contributing 20%. Mr Sunak also announced a flexible furlough scheme for working part-time will go live from 1 July, one month earlier than planned.
eBay bids prove power of classifieds
Initial bids of $8bn-$10bn for eBay’s classifieds business proves digital classifieds businesses “have not lost any of their investor appeal during Covid” says media industry expert Colin Morrison. A recent valuation by Bank of America gave it a 21x multiple on 2021’s estimated $389 profits.
BLOG: Back to work
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