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Lookers vows to repay Government furlough funding after record H1

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Lookers has vowed to repay £4.1 million in Government furlough support after reporting record H1 financial results and completing the appointment of a new chairman and chief financial officer.

The AM100 PLC reported this morning (September 9) that its revenues had risen by 37.1% to £2.15 billion (2020: £1.57bn) during the trading period to June 30 as it outperformed the market with a 17.4% rise in new car sales and a 38.3% rise in the used sector.

Chief executive, Mark Raban, said that improvements to the group’s omnichannel car retail channels had partly driven the improvement, which delivered a turnaround from a pre-tax loss of £50.4m in 2020 to PBT of £50.7m in the first six months of this year.

The group’s interim statement also highlighted the effects of “unprecedented used vehicle margins” on its buoyant trading performance.

Used vehicles represented 44.2% (2020: 45.4%) of Lookers’ total revenue and 34.8% (2020: 26.8%) of total gross profit in the reported period.

The results also reflect a resilient aftersales performance and the benefits of material cost reductions resulting from a 2020 restructure targeting £50m in annual savings.

Lookers chief executive Mark RabanRaban said: "We have delivered a record performance in H1 despite significant COVID-19 related disruption.

“Demand has continued to be strong as we see a sustained preference for car-based travel amongst consumers.

“We have been able to capture this demand and outperform the market through continued improvements to our omni-channel customer experience which allows customers to purchase cars with us however they wish.

“The rapid growth of electric vehicles (EVs) continues apace, and we are well positioned to maximise this exciting growth opportunity alongside our other strategic growth pillars.

“Whilst we are mindful of various short-term pressures, particularly around supply, with a refreshed Board, a restructured business and an enhanced digital proposition, there is much to look forward to."

Board refresh completed

Lookers brought its efforts to “refresh” its board to a successful end with the appointment of Ian Bull as non-executive chairman and Oliver Laird as CFO.

Lookers non-executive chairman, Ian BullBull is currently senior independent director at Domino's Pizza Group and a non-executive director at Dunelm and chairs both PLCs’ audit committees.

He has also been a non-exec director at St Modwen Properties where he was also chair of the Audit Committee and has held recent positions as CFO at Parkdean Holidays, Ladbrokes plc and Greene King.

Laird had been CFO at CPP Group – the listed multinational financial services business – since 2017 and was previously finance director at First Direct Bank, Cooperative Insurance and UK General Insurance Limited.

Furlough repayment

Following the lead of Marshall; Motor Group, Lookers’ voluntarily repayment of all Coronavirus Job Retention Scheme (CJRS) grants received for H1 (£4.1m) will be repaid before the end of 2021, the group has said.

Alongside record profits, the group announced that it had taken the decision after H1 proved to be a  strong period of cash generation, with net cash of £33.0m at June 30 (31 December 2020: Net Debt £40.7m).

The board also stated that it intends to resume dividend payments as soon as possible and will next review the position when releasing its 2021 full year results.

Outlining the group’s outlook for the remainder of 2021, Raban said that trading during July and August had “remained strong, exceeding expectations, primarily driven by unprecedented used vehicle margins”.

He said that order take also remained robust and the Group has a strong order book for September and the remainder of 2021, but added: “Given the ongoing and well documented new and used vehicle supply restrictions, combined with uncertainty resulting from COVID-19, there remains considerable variation in vehicle delivery dates and availability and in this context the board believes it is right to retain its cautious approach.

“Notwithstanding this, the group remains well positioned for the remainder of 2021 and beyond.”

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