Car dealership Lookers issues second profits upgrade in two months

8 April 2021, 09:24

People look at new cars
Coronavirus – Mon Jun 1, 2020. Picture: PA

The business said that, despite lockdown measures closing forecourts, sales held up better than expected in the first three months of the year.

Car dealership business Lookers has issued a second profits upgrade in as many months, pushing shares back above pre-pandemic levels.

Bosses said that, despite dealerships remaining closed in the first three months of the year, online sales and Click and Drive services have helped maintain demand, which is expected to push profits about analysts’ expectations of £22.6 million.

Shares soared in early trading on Thursday, up 10% to 69p.

Total vehicle sales have fallen in the UK during the first quarter of 2021 due to the pandemic forcing people to stay at home.

However, the latest figures from the Society of Motor Manufacturers and Traders (SMMT) for March showed a surge of 11.5% as the public look to start travelling once restrictions ease.

Lookers said that, despite restrictions, it sold 44,000 new and used vehicles, with resilient after-sales and strong cost controls, leading to a performance “ahead of board expectations”.

New vehicle sales in the quarter were flat – compared with overall market conditions seeing new car registrations down 12% – with Lookers taking a 7% market share.

Used vehicle sales were down 6% on a year earlier, although vehicle values remain robust, the company said.

Lookers added that showrooms will reopen from next Monday, in line with non-essential retailers welcoming back customers, and bosses remain cautious for the year ahead.

However, despite the caution, the company said it expects underlying pre-tax profits in 2021 to be “materially ahead” of current expectations by City analysts.

It follows an upgrade last month on expected profits for the last financial year, with pre-tax profits of around £10 million – up from £4.2 million in 2019 – despite the Covid-19 pandemic.

Analysts had previously predicted a small loss as a result of the various lockdowns and travel restrictions forcing drivers off the road.

By Press Association