Lookers expects to make a record £82m-plus underlying pre-tax profit for 2021.
The dealership chain made the announcement in a trading and group strategy update for its financial year to December 31, issued via the London Stock Exchange today (Jan 7).
Its full-year results will be published on Wednesday, April 13, when dividends are set to be restored, but ahead of that it said there was an ‘expectation of record underlying profit before tax ahead of [the] company-compiled market consensus of £82m’.
As of the year end, Lookers also had £8m net cash, versus a £40.7m net debt at the same time in 2020.
The board began a major review of the group last October, and chief executive Mark Raban said today: ‘2021 was an exceptional year for Lookers and we now expect to beat our previous estimates with record profit for the year.
‘This is a great achievement by the whole team in a year, which brought many external challenges, including Covid and vehicle shortages, demonstrating the strength of our proposition.
‘With net cash at the year end, we have a strong balance sheet and good capacity to invest in future growth opportunities.’
He added: ‘There are many structural changes which are creating opportunities in our market, including evolving consumer behaviour, electrification, and changing relationships with our brand partners.
‘The board and executive have been refreshed, and we are well progressed with a major review both to improve our operational performance and to future-proof our revenue streams through a number of strategic growth opportunities.
‘We have outlined our main areas of focus in our update today and are excited about our ambition and aspiration to become the UK’s leading integrated automotive retail and services group.’
Trading in the fourth quarter stayed strong and above board expectations, mainly thanks to ‘excellent new and used vehicle margins, a continued focus on tight cost control and like-for-like growth in aftersales revenues’.
Lookers highlighted the ongoing worldwide semiconductors crisis, which it said was putting pressure on new and used vehicle supply.
Like-for-like new retail vehicle sales rose by some two per cent, while used vehicle sales were down by approximately 14.2 per cent. Aftersales revenues were some 7.1 per cent ahead of the previous year on a like-for-like basis.
The board added that 2022 will see it voluntarily repay in full £1.9m of non-essential retail sector Covid-19 grants, following the £4.1m furlough cash relating to 2021 that it repaid.
It follows news that Lookers has relocated its Ford van centre in Colchester from Newcomen Way to a state-of-the-art site in Magdalen Street.
The former centre will continue to run a Ford aftersales service with expanded facilities.