06 April 2022

Lookers has revealed record annual results with a pre-tax profit of £90.0 million on a revenue of £4.05 billion for 2021.

The results mark a 9% rise in revenue from £3.70bn in 2020 and a marked rise in underlying profit from £13.7m in the previous 12 months. Underlying earnings per share are up from 2.97p to 20.07p.

Lookers has also appointed a new non-executive director Deborah Sherry who is an is a highly experienced technology and digital specialist, having held senior executive positions at leading technology companies around the world for over 20 years. Ms Sherry’s career has included senior technology and commercial roles at France Telecom, Google, GE and Amazon with direct exposure to OEM and industrial clients. Most recently, until January 2022, Ms Sherry was an executive director in the role of chief commercial officer at Future PLC.

CEO Mark Raban moved to put the previous two years’ “challenges” which included several new board directors and an investigation by the FCA. Commenting on the results, he said: “2021 was a record year for Lookers. We navigated another year of limited new vehicle supply and Covid-19 disruption. We have reported excellent profits and cash generation, through strong used car margins, continued focus on costs and the unstinting efforts of our people. We have successfully moved back to a net funds position in the business and have a strong balance sheet, underpinned by our property assets, supporting our investment capacity to grow the business.

“The business and our customers face some uncertainties in 2022. Trading in Q1 has been strong despite new vehicle supply remaining tight. The current crisis in Ukraine and significant cost of living increases will put pressure on consumer sentiment and disposable incomes. However, the group is looking forward to the future with confidence. It has emerged from the challenges of the past couple of years stronger and with a clear strategy to navigate future challenges and drive value for all our stakeholders.”

Looking ahead to the rest of 2022, he added: “The momentum of last year has continued into trading in the first quarter of 2022. Robust consumer demand and supply constraints on both new and used vehicles have seen gross margins being maintained at 2021 levels. This, combined with a tight control on costs sees the business ahead of 2021 on an underlying profit basis.

“The ongoing semiconductor shortage is likely to see new car supplies constrained for the remainder of 2022. Headwinds caused by high levels of inflation in areas such as utilities, mean the group will experience material cost increases. Wider inflationary pressures and the macro-economic impacts of the crisis in the Ukraine add significant uncertainty to the trading conditions faced by the group. Notwithstanding these uncertainties, the board remains confident about the outlook, and that the group is well placed for the remainder of 2022.”

Mark Raban will be a speaking at the Auto Retail Network Performance Conference, more details here.

Financial highlights

• Group revenue up 9% to £4,050.7m (2020: £3,699.9m)
• Gross profit margin increased to 12.8% (2020: 11.1%)
• Underlying profit before tax of £90.1m (2020 restated: £13.7m), primarily driven by used vehicle margins
• Exceptional operational performance and working capital management has resulted in net funds of £3.0m (2020: net debt £40.7m)
• The Board’s capital allocation policy focuses on investment to grow revenue and profits, and maximise shareholder returns through the disciplined deployment of cash
• Reinstatement of a dividend with a proposed full year dividend of 2.5 pence per share, which the Group intends to grow progressively

Tags: Lookers, Raban