Car dealership group suffers pre-tax profits fall, despite better revenues
Lookers, the Altrincham-based car sales and parts group, reported a fall in pre-tax profits today.
Announcing annual results to December 31, 2018, the nationwide business revealed a 9% decline in profits before tax of £53.1m, despite a 4% uplift in turnover, from £4.67bn to £4.88bn.
Shareholders will still enjoy a 5% improvement in the total dividend of 4.08p per share.
The group said its total new car turnover decreased by 3.3% and 3% on a like-for-like basis, with gross profit per unit increasing.
Total used car turnover was up 14% and the same on a like-for-like basis as Lookers continues to grow its presence in this market.
Its aftersales division saw turnover jump 6% on an absolute basis and 7% on a like-for-like basis, with increased profitability.
Cost inflation affected property, salaries and IT systems, although the group said it continued to invest to improve dealerships and develop its multi-channel customer experience.
It completed the acquisition last September of Jennings Group, expanding Lookers’ partnership with Ford in the North East.
Looking ahead, the group said it has made a good start to 2019 with its order book for the delivery of new cars in March continuing to build in line with its expectations, while used car volumes continue to show growth and further opportunities in aftersales.
Chief executive Andy Bruce said: “We have produced a resilient set of results against a backdrop of more challenging conditions in the motor sector, increasing sales and maintaining profitability.
“In particular, growth in our used car and aftersales divisions has helped to offset the impact of a more muted new car market, demonstrating the resilience of our business model.”
He said: “We remain focused on our strategy of having the right brands in the right locations, underpinned by ensuring operational excellence across our portfolio of dealerships.
“This focus, combined with the quality of our people, is our formula for success and is helping us to increase market share.
“At the same time, we continue to explore opportunities to grow the Lookers estate and in September we expanded our presence in the North East with the acquisition of the Jennings Group.”
He added: “The order book for new cars in the important month of March is in line with our expectations and we expect to make further progress in used cars and aftersales.
“We remain mindful of a prolonged period of political and economic uncertainty, but we believe we are well positioned to strengthen our position to deliver growth and enhance shareholder value over the medium to long term.”
