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Lookers to axe 1,500 jobs after subdued reopening

The restructuring, which includes the permanent closure of 12 sites, will save £50mln per year

Lookers PLC - Lookers to axe 1,500 jobs after subdued reopening

Lookers PLC (LON:LOOK) said it is to axe 1,500 jobs as well as closing 12 sites after a subdued reopening of activities.

The restructuring, coming with a one-off charge of £9mln, will save £50mln per year in payroll costs.

READ: Pendragon has merger plan rejected by rival car dealer Lookers

The car dealer has been offering maintenance services since April, implemented a new contactless vehicle delivery process on 18 May and reopened most salons on 1 June.

However, the current orders equal 51% of last year’s like-for-like sales for the same period.

At the end of May, 66% of staff were in furlough, which is expected to reduce to 55% this month.

Last month ended with £57mln net debt and an adjusted net book value of £325mln.

Peel Hunt forecast an £80mln full-year loss for revenues dropping 32%.

"Any incentive scheme to kick-start car sales would have a material impact on demand, as was the case after the financial crisis," analysts commented.

"Car retailing has been ripe for disruption and change, noting both Lookers and competitors such as Vertu have accelerated digital capabilities over lockdown."

Shares rose 8% to 25.05p on Thursday morning.

--Adds analyst's comment, shares--

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