Lookers - Strong performance continued through Q321

Lookers upgraded its FY21 profit expectations following a continued strong Q321 financial performance in positive but increasingly challenging conditions. Margin attainment is excellent, offsetting lower volumes in both new and used segments with high-margin aftersales remaining robust. The positive effect on cash flow is reflected in adjusted net cash (excluding leases) of c £30m at Q321. We upgrade our FY21 PBT and EPS by 35% and 34%, respectively, to reflect the exceptional trading. While FY22 is likely to see more normal levels of profitability as supply issues are resolved, we have modestly increased our PBT expectations by 1%.