Lookers underlying profit rises despite Covid-19 challenges
Vehicle retailer Lookers reported revenue of £3.7bn in its preliminary results on Thursday, down from £4.8bn a year earlier, which the board put down to the impact of lockdown and trading restrictions throughout the year.
The London-listed firm said its underlying profit before tax totalled £14.1m for the year ended 31 December, rising from £4m year-on-year, with “strong performance” in the second half more than offsetting a challenging first half.
Statutory profit before tax came in at £2.0m, swinging from a loss before tax of £45.7m in 2019.
Lookers reported an outperformance against the UK retail new car market of 9.6 percentage points, with “resilient trading” in used cars and aftersales.
During the year it completed a “significant” restructuring, reducing its headcount, strengthening its operating model, and materially reducing its cost base.
Lookers said it was on track to deliver annualised savings of around £50m.
The firm said it had a “strong” balance sheet, with a property portfolio valuation of £300m, or 77p per share.
It reported a net cash position of about £18m currently, while it agreed a revolving credit facility extension with its existing banking partners for an initial £150m.
Lookers also noted that a Financial Conduct Authority (FCA) investigation into itsa historic sales processes had closed without sanctions, resulting in the release of the prior year £10.4m provision.
“2020 was a challenging year for the group, dealing with both the impact of Covid-19 and the Group's legacy issues,” said chief executive officer Mark Raban.
“We are emerging from this period operationally, financially and culturally as a better business, focused on putting the customer at the centre of everything we do.”
Raban said the company was expecting to build on the firm’s “strong momentum”, underpinned by its manufacturer relationships, “omni-channel” technology platform and staff.
“We are now in a great position to benefit from the many growth opportunities available for the business.”
At 0831 BST, shares in Lookers were up 0.4% at 70.98p.