Altrincham-based car dealership Lookers plc said on Thursday its revenue fell 23% to £3.7 billion in the year to December 31, 2020 “impacted by lockdown and trading restrictions throughout the year.”
However, Lookers’ underlying profit before tax rose to £14.1 million from £4 million in 2019 “with strong performance in the second half of the year, more than offsetting a challenging first half.”
Statutory profit before tax was £2 million compared to a 2019 loss before tax of £45.7 million.
The company said its full year 2021 outlook is “ahead of current expectations.”
Lookers said an investigation by the Financial Conduct Authority (FCA) into the group’s historic sales processes “closed without sanctions, resulting in the release of the prior year £10.4m provision.”
On current trading and outlook, 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.”
Lookers added: “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.”
On dividends, Lookers said: “The dividend policy remains that subject to satisfactory trading prospects, dividends are covered around 3.0 to 3.5 times underlying earnings and paid in approximately one third (interim dividend) and two thirds (final dividend) split.
“In the light of the financial performance during the period, continued uncertainty around Covid-19 and as part of its ongoing actions to protect the group’s balance sheet the board has decided not to recommend any dividends for the year.”
Lookers CEO Mark 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.
“We are now in a great position to benefit from the many growth opportunities available for the business.”