Lookers says second-half profits to offset interim losses

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Lookers PLC (LON:LOOK) said performance in the second half of the year is expected to be ahead of 2019, so it will offset the interim losses caused by COVID-19.

The car retailer said the current closure of showrooms will impact revenue but it will be partly mitigated by the ‘Click and Drive’ initiative to buy cars without any contacts and the continued operation of the covid-compliant servicing division.

It did not provide guidance for the current financial year but said it is well-positioned to benefit from sector developments including electrification and further digitisation.

Trading in the second half of 2020 was encouraging, underpinned by significant outperformance of the retail UK new car market, continued resilient trading in used and aftersales and increasing used car margins, alongside the early impact of the group’s restructuring programme. 

So far, Lookers has closed 12 sites and completed 1,500 job cuts.

Net debt was cut to £45mln at the end of December after Lookers sold £17mln worth of assets, while the disposal of Platts Harris in November will realise proceeds of £1.6mln to be recognised this year.

In the delayed results for the six months to June 30, revenue tanked 40% to £1.5bn and Lookers posted a £50mln loss before tax from a £20mln profit the year before. The firm did not propose a dividend.

In a separate announcement, the company announced the promotion of Duncan McPhee as its new chief operating officer.

He has over 25 years of experience in the motor retail industry and has been at Lookers for the past 12 in senior management roles.

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