Lookers has driven pre-tax profits up by £26.4 million in its annual results for the year ended December 31, to make £11.5 million following a loss of £14.9 million in 2008.
Profit from operations increased by 187% to £29.3 million (2008: £10.2 million) and the business has an operational cashflow of £20.1 million.
The group reduced its stocks by £56.2 million last year and net debt was reduced by £70.5 million. Lookers’ gearing is now at 49% in comparison to 180% in 2008.
Peter Jones, Lookers chief executive, said: “We are pleased to announce that we have delivered a record trading performance for the company in 2009 despite difficult market conditions.
“Although we believe that market conditions will remain challenging in 2010, we are encouraged to report that we have made a strong start to the year.
“The strong performance from both the parts and motor divisions, supported by our strengthened balance sheet and reduced cost base, places us in a strong position and gives us confidence that we will continue to trade successfully through the period, and be in a position to pursue strategic growth opportunities as they arise.”
Lookers dual franchised eight businesses in 2009 and saw new car sales and used car sales increase like-for-like by 13% and 6% respectively.
Phil White, Lookers chairman, said: “As I reported in our last annual report, the second half of 2008 saw an unprecedented decline in new car sales volumes and used car values which resulted in management taking decisive action at the time to restructure the motor division with the closure of 21 underperforming franchised operations.
“This action significantly reduced overheads, strengthened the business and placed it in a stronger position to trade through the economic downturn.”
White said the majority of Lookers’ gross profit is generated from aftersales and its independent parts division which represent 60% of gross profit and both were not subject to cyclical fluctuations in the new car market.
He said: “The new year has started well with current trading being ahead of both our budget and the prior year.
“We continue to outperform the new car market and trading in the motor division is ahead of both budget and prior year. The independent parts division continues to perform well and is showing further progress.
"We are therefore confident that the company will emerge from the current downturn a stronger and more efficient business which is well placed to deliver future growth.”