Lookers profits down nearly 40%
14 August 2019
Lookers’ pre-tax profits for the first half of 2019 were down 39.7% on figures from the same time last year to £24.9 million against £41.3m in H1 2018. However, excluding non-underlying items the fall was reduced to 27.5% which is just below the group’s profit warning issued a month ago.
Underlying profit before tax hit £29.2m on a turnover of £2.65 billion. The revenue figure was up 2.7% in the first half of this year compared to 2018.
Andy Bruce, chief executive of Lookers, said: “Our performance for the first half reflects an ongoing backdrop of challenging UK market conditions for the sector. Whilst we are reporting lower profits year-on-year, we have made good progress on a number of strategic initiatives and have a clear investment plan to restructure and strengthen our regulated activities. Our balance sheet remains strong including our valuable property portfolio. Working closely with our brand partners I am confident in the long-term prospects for the business. The Board’s current outlook for the full year at the underlying profit before tax level remains unchanged.”
Lookers reported retail new car units sold decreased 5.9% in H1, with fleet units up 4.3% on a like-for-like basis. Used car units sold were up 2% like-for-like and aftersales revenue was up 6.2%.
Lookers chairman Phil White added: “The board expects that the more recent challenging conditions are likely to continue during the second half of the year with continued weakness in consumer confidence in the light of political and economic uncertainty and further pressure on used car margins. There is also the possibility of new vehicle supply restrictions as real-life emissions regulations come into force in Q3. In addition, the retail cost inflation pressure experienced in H1 could continue to impact earnings during the second half of the year.”
As with Marshall Motor Group’s half-year results, issued yesterday, Lookers also highlighted the impact of the IFRS 16 accounting regulations that change the way lease-hold properties are recorded on the balance sheet.
Lookers has previously warned that its full-year figures for 2019 would also be below expectations. The firm is also still being investigated by the FCA.