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Lookers trading ‘ahead of expectations’ in first quarter despite drop in new and used car sales

Time 7 months ago

Listed dealer group Lookers says its performance for the first quarter of 2021 has been ahead of board expectations.

With its dealerships closed due to the lockdown, the dealer group managed to sell 44,000 new and used cars compared to 49,000 in the same period last year before the pandemic struck.

A new ‘contactless technology’ platform allowed the group to service customers with a combination of dealership staff, call centres and its website.

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Used car sales were six per cent down like-for-like on last year, but strong margins and ‘inventory management’ helped the group.

The group doesn’t give specific figures for its new car performance but says it ‘significantly out performed the UK retail market’. 

Overall, SMMT figures for the quarter show retail registrations were down 18 per cent and fleet down six per cent.

Lookers says its sales were ‘flat’ compared to last year for the quarter and accounted for seven per cent of all sales in the new car retail market.


No financial figures were given during the update.

Chief executive Mark Raban said: ‘Despite the challenges presented by the third national lockdown, we have performed ahead of our expectations in Q1. 

‘Our colleagues and customers have shown great resilience and flexibility, fully embracing new technology, amidst a difficult environment.

‘The events of the last year have highlighted the inherent strength of our franchised dealership model and the importance of an integrated customer experience which fully embraces both digital and physical channels and we have been able to enhance our online capabilities at pace.

‘As we emerge from lockdown restrictions, we look forward to welcoming customers back to our dealerships and with new technology and improvements to the Lookers proposition, we are well placed to capitalise on the many opportunities ahead.’

Lookers CEO Mark Raban

Lookers CEO Mark Raban

Aftersales revenue for the group for the quarter was ‘resilient’, down three per cent on last year.

Looking ahead to dealerships reopening on Monday, the group said the safety of its staff and customers was a ‘key priority’.

The Stock Market update added: ‘Given ongoing uncertainty around both Covid-19 and consumer sentiment, the board believes it is right to remain cautious about the outlook for the remainder of the year.

‘However, based on the better than expected performance in Q1, the board’s expectation for underlying profit before tax for the full year ended 31 December 2021 is now materially ahead of the current analyst consensus.’

Analysts had previously estimated that Lookers would post a profit for 2021 in the region of £22.6m.

Peel Hunt said in a note this morning to investors that it was upgrading its profit before tax forecast for Lookers by 47 per cent – up £11m to £34.8m.

The Lookers share price has grown steadily since it was relisted on the Stock Market earlier this year. This morning it was trading at 62.6p.

Lookers timeline: What’s happened when? 

Click on the date to read the full story

March 18, 2021 – Lookers said it expects to make a profit before tax of around £10m for 2020 – up from £4.2m for 2019 as it reveals talks with banks are ‘progressing’.

March 15, 2021 – Lookers’ previous auditors Deloitte under investigation by Financial Reporting Council of its work on the group’s accounts in 2017 and 2018.

March 2, 2021 – FCA investigation closed and no fine imposed on Lookers. FCA expressed ‘concerns’ relating to ‘historic culture, systems and controls’, but said no further action would be taken.

January 29, 2021 – Lookers revealed it lost £36.1m in the first half of 2020. The interim results led to shares being relisted on London Stock Exchange. They immediately rose 77 per cent.

January 6, 2021 – Lookers appoints Anna Bielby as interim chief financial officer, but there was no news on the delayed interim results.

December 29, 2020 – A third of shareholders vote against Lookers directors’ remuneration packages – including CEO Mark Raban’s £450k salary – at a general meeting.

December 18, 2020 – Lookers tells investors that its interim results, promised to be delivered before the end of the year, will now not be published.

December 9, 2020– Lookers reveals interim CFO Jim Perrie has quit early and says it is ‘unlikely’ the interim results will be out before the end of the year.

November 25, 2020 – Lookers finally releases its annual accounts for 2019 showing a statutory loss for 2019 of £45.5m. Promises interim results in December and the hopeful reinstatement of shares on Stock Market.

October 31, 2020 – Long-standing Lookers non-executive director Tony Bramall, one of the group’s major investors, brings forward the date he will leave the board to the end of December. No reason is given for his early departure.

October 19, 2020 – Lookers updates market on performance in Q3, but still no word on its 2019 accounts or the FCA investigation. Analysts expect results to be out before December.

August 20, 2020 – Accounts delayed for fourth time and no promise given as to when they’ll be published.

June 9, 2020 – Lookers says it will suspend shares on July 1. Delays accounts for third time and says they’ll be published ‘no later than the end of August 2020’.

June 5, 2020 – Lookers says it will axe 12 dealerships and cut 1,500 jobs.


May 2020 – Pendragon CEO Bill Berman admits he wrote to Lookers to discuss a merger and updates Stock Market to that effect. Move described as ‘two drunk men bumping into each other in a bar’.

April 2020 – Fraud investigation deepens. £4m charge revealed and firm says there could be more. Delays accounts to June.

March 12, 2020 – New chief operating officer Cameron Wade leaves role after only a month in post.

March 11, 2020 – Lookers delays results, saying that in final stages of preparation ‘potentially fraudulent transactions’ in one division were discovered. Promises results in April.

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November 2019 – Chief executive Andy Bruce and chief operating officer Nigel McMinn leave firm abruptly.

June 2019 – FCA launches review into sales processes at Lookers between January 2016 and June 2019. Lookers cannot ‘estimate what effect, if any, the outcome of the investigation may have’.

December 2018 – Lookers launches independent internal audit into sales process. It eventually finds ‘control issues’ in sales process where ‘improvements’ are needed. Findings handed to FCA.

 

James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

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