Lookers chief executive Mark Raban has said that he is “delighted” with the car retail group’s 2022 financial results performance in light of the “supply disruption, inflation and rising interest rates” experienced in the period.
Turnover rose 6.2% to £4.3 billion (2021: £4.05bn) as the AM100 group’s underlying pre-tax profits declined 8.2% to £82.7m (2021: £90.1m) in the trading period to December 31, 2022.
That PBT performance represented 3% growth, however, with the exclusion of the £9.8m of UK Government COVID-19 support received during 2021.
Despite new car supply issues and difficulties sourcing used vehicles the group highlighted the role of strong margins in the result, with a GPU on new vehicles up over 30% at £1,949 and stable on used vehicles at over £2,100.
AM Awards 2022 Business Leader of the Year Raban was keen to focus on the progress of strategic, long-term strategic developments withing the group in his results statement, however, including the growth of Lookers’ mobile cosmetic repair service and its expansion with new brand partners BYD, Great Wall Motors’ Ora electric vehicle (EV) brand, XBus and Lotus.
Raban said: “I am delighted to report another excellent performance achieved against a backdrop of material supply disruption, inflation and rising interest rates. It makes me immensely proud of the Lookers team and the progress we are making together.
“We have strong momentum in the execution of our strategic priorities. Our operational optimisation agenda remains the cornerstone of our strategy and we have made demonstrable progress on our self-help initiatives.
“In addition, I am particularly pleased to see the expansion of our offerings through partnerships with a number of exciting new brands and the addition of incremental revenue streams including cosmetic repairs.
“We remain mindful of pressures faced by the consumer and on discretionary spending. However, we are confident in our proposition, our balance sheet and strategic focus, with significant opportunities ahead.
“With good momentum across the business, we have continued to trade strongly in Q1 2023, and the Board’s outlook for underlying PBT for the current financial year is now ahead of its previous expectations.”
Lookers said in today’s results statement that it had delivered significantly increased penetration of finance and ancillary products during 2022, generating an additional £15.7m income in the year.
That included 31,000 used warranties (2021: 12k) with 163,000 live service plans in operation.
Strong working capital cashflow management also generated a £32.1m of cashflow benefit.
Lookers said that it had ended 2022 with a robust balance sheet showing net cash of £66.5m (2021: £3.0m) and a property portfolio with a net book value of £290.5m, equivalent to a combined 92p per share.
Strong start to 2023
A strong start to Q1 has also led the board to raise its expectations for underlying PBT for the year ended 31 December 2023. Forecasts are now up from £60.3m to £70.5m for this year.
Lookers said that efforts to drive its used car sector penetration would result in the opening in the first of a new, standalone multi-franchise operation to be operational from existing premises Q4.
Among Lookers’ recent dealership developments are a new Lotus Cars dealership in Belfast, the group Great Wall Motors (GWM) Ora dealerships in Braintree, Belfast and Wolverhampton, BYD in Middlesborough, Sheffield and Northern Ireland and the XBus electric van brand in Gateshead.
The business is also in the process of growing its relationships with Polestar and BYD – building new dealership facilities.
In March Lookers also acquired £3.8 million turnover fleet and leasing business Fourways Vehicle Solutions to grow its customer base in the corporate sector.