Lookers PLC (LSE:LOOK) forecast record underlying profits for 2021, above the market consensus of £82mln, and said it intends to resume dividend payments alongside its full-year results.
In a trading statement, the car dealer said it is starting 2022 with an “excellent” new car order bank, although it sounded a cautious note on ongoing global supply chain constraints, uncertainty over the availability of new vehicles and the impact of inflation and rising energy costs.
Lookers said trading remained strong and above its expectations in the fourth quarter of the year to 31 December 2021, driven by “excellent” new and used car margins.
It noted the global shortage of semi-conductors continued to put pressure on the supply of new and used vehicles. Like-for-like new retail unit sales rose by 2.0%, while used unit sales fell approximately 14.2% in the fourth quarter.
Aftersales revenues remained robust and on a like-for-like basis were 7.1% ahead of last year, Lookers said.
The company had net cash of £8mln as at 31 December 2021, compared with net debt of £40.7mln a year earlier, and property with a book value of £303.9mln, or 77.8p per share, at the end of June.
"2021 was an exceptional year for Lookers and we now expect to beat our previous estimates with record profit for the year,” Lookers chief executive Mark Raban said.
“With net cash at the year end, we have a strong balance sheet and good capacity to invest in future growth opportunities.”
He said the company’s strategic review is progressing well.
“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,” he said.
Shares rose 0.57% to 70.40p