ONE of the UK’s leading car dealership and service companies, Lookers, has published “strong” first half results for the six months to June 30, crediting growth in sales of used vehicles and aftersales for driving revenues while outperforming the UK new car market by 1.7 per cent.
Revenues of £2.23 billion were up on the previous year’s turnover of £2.153 million while pre-tax profits of £49.9m were slightly down from £50.4m. However, the company, headquartered in Altrincham, Greater Manchester, said this was against “an exceptional comparative period”.
Lookers, which owns Taggarts, one of the best-known names in the Scottish motor trade, said it was buoyed by first half trading, despite supply constraints on new vehicles, with “excellent” cash generation with net funds of £78.5m at June 30 compared with £3m in December 2021, driven by strong trading and robust working capital management.
The sale of new vehicles represented 39.1% of total revenue, down from 43.5% in 2021, and 29.8% of total gross profit, down from 25.8%. Lookers noted that the overall new car market continues to be impacted by supply issues caused by semiconductor chip shortages.
Lookers experienced growth in the electric vehicle (EV) market during the period, with EVs now representing 14.4% of UK new car registrations and the company’s EV sales mix higher than the national average at 17.8%, increasing from 12.5% in the first half last year.
Mark Raban, chief executive, said: “Our first half financial performance was very strong, against an exceptional comparative period, despite ongoing inflationary pressure and vehicle supply disruption. We have also made excellent progress with our strategic priorities.
“We remain focused on our customers and improving our proposition to ensure the process of buying or leasing a car is as easy and simple as possible, particularly in the current challenging economic environment.”
He added: “We are focused on operational ‘self-help’ efficiencies across the business. At the same time, we continue to pursue a number of exciting growth opportunities.
“While mindful of the pressures facing consumers, we are confident in our strategic direction and retain our expectations for the remainder of the year.”
Operating 143 franchised dealerships representing 31 manufacturers across the UK and Republic of Ireland, the company noted that its performance was “notable against a backdrop of increasing inflationary pressures, including both employment and utility costs”.
Despite the material cost headwinds and wider macroeconomic uncertainties, Mr Raban said the group remains “well positioned to deliver on its strategic priorities for the remainder of 2022 and beyond”, adding: “Supply disruption in the first half of the year made trading conditions challenging.”
Trading during July and August has been in line with expectations, Mr Raban noted.
Lookers confirmed that given the “ongoing strong recovery” of the business since the impact of Covid-19, the board had taken the decision to repay the £1.5m business rates relief received in Q1 of the current year.
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