£50m losses revealed but car dealership hopes it is on road to recovery
Lookers is trying to get back on the road to recovery after “a challenging year” for the car dealership group.
Its performance in the second half of 2020 outperformed the previous year, and will have clawed back a large part of the losses incurred in the first six months of the year.
Car sales has been badly hit by Covid-19, with new car registrations hitting a 30-year low in 2020.
Lookers has also faced its own problems. Shares in the Altrincham-based group have been suspended since July after it launched an investigation into a cash expenses fraud that delayed it publishing its 2019 accounts.
Those accounts showed a pre-tax loss of £45.5m and it has today revealed it lost £50m in the first half of 2020, as revenues fell by more than £1bn to £1.56bn. It responded by making 1,500 redundancies and closing 12 sites.
Mark Raban, who became chief executive in mid-2019, said: “2020 was a challenging year for Lookers, managing the impact of the Covid-19 pandemic and a number of legacy issues facing the group, which required significant action to restructure and improve the business for the long term.
“Despite a resilient sales performance, the benefit of Government support and prompt action taken to manage costs, in the first half we incurred a significant loss in a very difficult period for the car retail industry.”
Raban said “trading improved significantly” in the second half of 2020 as the cost savings began to have an impact while the group also changed its processes to be able to offer contactless vehicle sales.
The group, which has applied to the FCA to have its shares restored, will not be paying any dividends for 2020 but said it plans to “reinstate the payment of dividends as soon as it believes that it is prudent to do so”.
