Lookers today (Oct 6) increased its full-year underlying pre-tax profit expectations.
In a trading update for the third quarter ending September 30, issued this morning via the London Stock Exchange, it said business had been strong during the three months.
While the UK new car market fell by 31.1 per cent, the chain outperformed it by about 3.4 percentage points, which would equate to a drop of about 27.7 per cent.
The motor retail group said trading had been helped by ‘excellent new and used vehicle margins and continued tight cost and working capital control’.
Like-for-like used vehicle sales were down by 16.9 per cent during the quarter, while aftersales revenue was 3.5 per cent below last year.
As of September 30, 2021, Lookers’ net cash balance was about £30m versus a net debt of £25.9m on the same date in 2020.
It has also made a start on repaying furlough cash, having given back £4.1m of the £12.7m in Coronavirus Job Retention Scheme receipts that it had pledged to return.
Last month, Lookers announced that it made a record first-half year underlying profit of £50.3m.
However, in today’s update, it warned that although its new car order bank was ‘above normalised levels’, availability was still uncertain because of specific brand and model factors, with the impact expected to continue into 2022.
Despite this, the board said it now expected 2021’s underlying pre-tax profit ‘to be materially ahead of its previous expectations’, although it didn’t give a precise figure.
Chief executive Mark Raban said: ‘The group has built on its record first-half result and performed strongly in a challenging market, underpinned by further enhancements to its omnichannel experience, which allows customers the flexibility to buy a car however they choose.
‘Interest in electric vehicles continues to grow, particularly in light of the UK-wide fuel shortage, and the group remains well positioned to benefit from this exciting growth opportunity.
‘Although supply restrictions remain, we continue to work with our OEM partners to minimise the impact and I would like to thank my colleagues and customers for their patience and understanding.’
PA image shows customers on a Lookers forecourt