Lookers PLC (LSE:LOOK) said profits will not fall as much as expected, amid a continued shortage of new and used vehicles.
The motor dealer said it was "trading ahead of expectations", with underlying pre-tax profit for first half coming in around £45mln, below the £50.3mln achieved a year earlier.
The board anticipates the year will be significantly weighted to the first half and pre-tax profit will be higher than previously expected.
The company said it had a "strong H1 performance" and a good order bank going into the second half, though there were uncertainties concerning the availability of vehicles and the effect of inflationary pressures on consumer demand.
Lookers said momentum seen in 2021 continued into the first half of 2022, and that it had performed "broadly in line" with the total UK new car market’s 8.7% fall, but had "outperformed" the market in the brands it represents.
"Following a record year in 2021 we have maintained strong trading momentum whilst continuing to make progress with our key strategic initiatives," said Mark Raban, chief executive.
"There is no doubt that challenges lie ahead but with continued operational optimisation Lookers is extremely well positioned to continue to maximise its multiple growth opportunities."
Shares were trading 5.71% higher at 78.22p in London in early trades.
Broker Liberum said: "Even as supply starts to improve and demand comes under pressure going into 2023, our analysis suggests a crash is unlikely, given a shortfall of circa 2mln new car units 2020-22E."
Peel Hunt said: "While revenues are being held back by well-documented supply constraints (reflecting an order book that represents nearly six months of sales), the margin environment remains strong, conditions that are likely to persist over 2H, driving a c.18% upgrade to our full-year PBT forecast to £65.5mln."