Lookers has said that it can now “look to the future with confidence” after emerging from the most challenging period in its history.
In its 2020 annual financial results the AM100 PLC reported revenues down 23% to £3.69 billion (2019: 4.81bn) but underlying pre-tax profits of £14.1m were ahead of 2019’s restated £4m result and a statutory profit before tax of £2m well up on last year’s loss of £45.7m.
The result for the period to December 31, 2020, came in a year which saw the Lookers battle COVID-19 lockdowns, legacy issues which delivered a fraud investigation and a temporary suspension of shares trading, a board restructure and a wider group restructure involving the closure or consolidation of 12 dealership and 1,500 staff redundancies.
In his final annual results report before retiring from his post as group chairman, Phil White conceded that the group had experienced “material uncertainty throughout the year”.
But chief executive Mark Raban said that the outcome presented in today’s (July 1) annual financial results statement meant that Lookers was now “in a great position to benefit from the many growth opportunities available for the business”.
Raban said: “2020 was a challenging year for the group dealing with both the impact of COVID-19 and the group's legacy issues.
“We are emerging from this period operationally, financially and culturally as a better business, focused on putting the customer at the centre of everything we do.
“We expect to build on the strong momentum within the business, underpinned by our excellent manufacturer relationships, omni-channel technology platform and fantastic Lookers colleagues.”
Lookers annual results statement said that the business had delivered an outperformance against the UK retail new car market of 9.6ppts with resilient trading in used cars and aftersales.
Its accounts showed a 23.2% reduction in new car sales revenues (£1.71bn), 23.5% decline in used car revenues (£1.78bn) and a 22.5% dip in aftersales revenues (£383.8m) last year.
The completion of its restructuring operation claim to have put the business on-track to realise annualised cost savings of £50m with a reduced headcount and smaller footprint which put an emphasis on having the right car brands in the right locations, however.
Its statement of consolidated income included a £34.9m receipt from the Government's coronavirus job retention scheme (CJRS) and £10.2m of rates reductions under the Government's business rates holiday scheme.
Lookers said it had emerged from 2020 with a strong balance sheet benefited from a property portfolio worth in excess of £300m alongside a net cash position of approximately £18m.
In addition, the group has a previously-announced funding extension agreed with existing banking club for an initial £150m, while the lack of any Financial Conduct Authority (FCA) sanctions resulting from 2020’s investigation into the group's historic sales processes released a £10.4m provision set aside in the previous financial year.
Lookers said in today’s statement that it now intends to investment in its omni-channel customer experience.
It also plans to harness growth from the transition to electric vehicles through infrastructure investment and connected car services, alongside the roll-out of new aftersales products and services.
In a trading update for the first half of 2021, Lookers said: “Trading in the first six months of the year has been exceptionally strong underpinned by robust consumer demand, ongoing outperformance of the UK retail new car market, improving used vehicle margins and the group's self-help restructuring programme.
“As we look forward into the second half of 2021 there remains some uncertainty driven by the ongoing impact of COVID-19 and notable supply restrictions in both new and used vehicles which have been tightening in recent weeks.
“Notwithstanding these uncertainties given the strength of performance during the first half of 2021 the board remains confident about the outlook for the remainder of 2021.”