CAR dealership owner Lookers has hailed a record year despite coronavirus and new vehicle supply constraints.
The company, owner of the Taggarts chain of car dealerships in Scotland, said pressures emerging from Covid-19, the invasion of Ukraine, and the UK cost of living crisis are likely to continue but that it is “looking forward to the future with confidence” in its preliminary results for the year ended December 31, 2021.
Underlying profit before tax was £90.1 million against the restated total of £13.7m in 2020, largely driven by used vehicle margins.
A semiconductor shortage which is impacting new car supplies is set to continue for the rest of this year and inflation and energy price headwinds will bring cost increases, but the firm said it is “well placed for the remainder of 2022”.
Group revenue up was up nine per cent to £4.1 billion, against £3.7bn the year before.
It also proposed a full-year dividend of 2.5 pence per share, which it intends to grow “progressively”. Lookers’ 83,000 sales in 2021 gave it slightly more than 1% of the market.
It said its financial performance was further enhanced by actions over recent years to restructure the business.
The firm said: “There have been other favourable dynamics including the fierce demand for used vehicles in light of constrained new vehicle supply and an aversion to public transport as a consequence of Covid-19, which has contributed to a strong margin performance.”
Mark Raban, Lookers chief executive, said that “2021 was a record year for Lookers” as he presented the results.
“We navigated another year of limited new vehicle supply and Covid-19 disruption,” Mr Raban said. “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."
READ MORE: New car shortages set to continue
Trading in the first quarter has been strong despite new vehicle supply remaining tight, he said. "The current crisis in Ukraine and significant cost of living increases will put pressure on consumer sentiment and disposable incomes," Mr Raban said. "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."
Separately, Motorpoint revealed an 82% jump in sales to £1.32bn for the year to March, but warned that "the impact of rising inflation and worldwide vehicle supply challenges" is likely to affect its performance.
Pendragon last week warned that Putin’s war against Ukraine could exacerbate the shortage of new vehicles that has boosted prices across the market and allowed that dealership to also post record profits for 2021.
Pendragon's revenues for the year to the end of December rose by 18% to £3.44bn while profits surged by more than 900% to £83m, up from £8.2m previously.
Lookers also said: "This financial and operational performance gives us a robust platform from which to refresh our strategy. We head down this road with a strong balance sheet, allowing us to pursue and invest in new opportunities from a firm base."
Shares in Lookers closed down 4.17%, or 4p, at 92p.
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