MARKET REPORT: Soaring used car prices boost shares in Lookers

Car dealer Lookers has cashed in on a surge in second-hand car prices as semiconductor shortages hit sales of new vehicles.

It said the average price of used cars it sold was 27 per cent up in the first half of 2022 compared to a year earlier. But supply chain issues meant revenue from the sale of new vehicles fell.

Despite this, Lookers hailed the ‘strong’ demand for new cars and had 22,000 orders at the end of June, up from 9,000 last year.

Shares up: Car dealer Lookers said the average price of used cars it sold was 27% up in the first half of 2022 than a year earlier

In its interim results, Lookers reported a 3.6 per cent rise in revenue to £2.2billion. Meanwhile underlying profit hit £47.2million, beating Peel Hunt analysts’ forecast of £45million.

Lookers has repaid the £12.7million of Covid support it was handed and plans to return the business rates relief grant received during the first half of the year. It declared an interim dividend of 1p, as shares rose 11.2 per cent, or 8.4p, to 83.4p.

The FTSE 100 slid 0.2 per cent, or 16.6 points, to 7471.51 and the FTSE 250 fell 0.01 per cent, or 1.66 points, to 19,305.23. 

A cocktail of economic woes, from inflation, rising energy costs and supply chain disruptions, has hit markets since Russia invaded Ukraine.

With supplies constrained, the price of oil remained close to $100 a barrel, and energy stocks received a further boost from Barclays.

Shell dropped 1.1 per cent, or 25p, to 2292.5p despite the broker hiking its target price to 3300p from 3000p. 

Harbour Energy – Barclays’ top pick – had its target price raised to 715p from 540p. Shares rose 1.6 per cent, or 6.7p, to 430.5p.

Stock Watch – Allied Minds

Aim-listed Allied Minds left investors spooked by plans to delist. The intellectual property commercialisation investor, backed by the disgraced fund manager Neil Woodford, has reviewed shareholder value and thinks the cost of a premium listing is ‘prohibitively high relative’ to its size.

‘Maintaining a public listing is no longer in the best interests of the company and its shareholders,’ it said.

It will put its plans to investors. The shares tanked 40.1 per cent, or 7.5p, to 11.2p.

Some of the best-known London-listed firms made changes to their board. Pharma giant GlaxoSmithKline said industry heavyweight Liz McKee Anderson will join as a non-executive director next month. 

The former commercial leader on infectious diseases, vaccines, immunology and oncology at Belgian drugmaker Janssen, will be paid £95,000 per year and must take a stake in GSK.

It comes after Laurie Glimcher, announced she would be retiring from the board in October. Shares slid 0.3 per cent, or 3.6p, to 1399p.

At Easyjet, board members Julie Southern, Andreas Bierwirth and Nick Leeder are stepping down to be replaced by Harald Eisenacher, Detlef Trefzger and Ryanne van der Eijk. The low-cost carrier fell 0.3 per cent, or 1.2p, to 363.3p.

IWG, the world’s biggest provider of flexible office space, fell 0.2 per cent, or 0.3p, to 158.3p after poaching its chief financial officer from US-listed digital healthcare firm Babylon Holdings.

Charlie Steel will join this year, replacing finance boss Glyn Hughes who is leaving to be chief executive at a non-listed firm.

There was a setback for York-based Persimmon as shares fell 2.4 per cent, or 38.5p, to 1544p after analysts at Peel Hunt cut the target price to 2070p from 2330p. 

That filtered through the sector as Berkeley sank 1.4 per cent, or 52p, to 3791p while Barratt Developments was down 1.7 per cent, or 7.7p, to 435.7p and Taylor Wimpey slid 1.9 per cent, or 2.15p, to 110.95p.

Mid-cap housebuilders Bellway fell 2 per cent, or 43p, to 2102p, Vistry dipped 1pc, or 8p, to 808.5p, Redrow sank 0.7 per cent, or 3.5p, to 524p and Crest Nicholson ticked down 1.1 per cent, or 2.8p, to 246.6p.

Construction and engineering firm Costain improved its cashflow to £34.4million compared with £28.2million a year earlier, for the six months to the end of June. 

While orders fell to £2.7billion from £4billion last year, it is confident it can secure more contracts. It rose 1.1 per cent, or 0.45p, to 39.95p.

Tech firm Tracsis said revenue stood at around £69million for the year to end of July, up 37 per cent year-on-year. 

Analyst Liberum said it had enough ‘firepower’ to fund further mergers and acquisitions. It rose 3.7 per cent, or 37.5p, to 1047.5p.

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