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Lookers shares reverse as it posts a drop in 2018 profit as new car turnover declines

The car retailer reported a 9% fall in pre-tax profit to £53.1mln for the year-ended 31 December 2018, down from £58.4mln in 2017, although its revenue grew by 4% to £4.88bn
Car dealership
Lookers said volumes in the UK new car market fell by 6.8% to 2.4mln cars, affected by a shortage of supply

Lookers PLC (LON:LOOK) saw its shares reverse on Wednesday as the car retailer and servicing group posted a drop in 2018 profit as new car turnover declined.

The FTSE All-Share listed firm reported a 9% fall in pre-tax profit to £53.1mln for the year-ended 31 December 2018, down from £58.4mln in 2017, although its revenue grew by 4% to £4.88bn from £4.69bn.

READ: Lookers maintains expectations in spite of emissions test disruption

The group said volumes in the UK new car market fell by 6.8% to 2.4mln cars, affected by a shortage of supply caused by the implementation of the worldwide harmonised light vehicle test procedure in the wake of the Volkswagen diesel emissions cheating scandal.

It pointed out that new car like-for-like turnover fell by 3.0%, although used car turnover rose by 14% on a like-for-like basis, and aftersales like-for-like revenue increased by 7.0%.

The company said it made a good start to 2019, with its order book for new cars in March continuing to build in line with management expectations, while used car volumes have continued to show growth and aftersales is seeing further opportunities.

Lookers’ chief executive, Andy Bruce commented: "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.”

The group is paying a final dividend of 2.60p per share, making a total pay-out for 2018 of 4.08p, up 5.0% from 3.89p in 2017.

In late lunchtime trading, Lookers’ shares were 2.9% lower at 99p.

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Newswire
September 03 2015

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