Lookers has long been a respected leader among the UK’s mega-dealerships, consistently in the Top Five groups with a turnover around the £5billion mark. But even the good guys have off days. And so it was on Friday when Lookers announced its interim H1 2020 financial results showing a £50million loss.
It has recommenced shares trading and pointed to the impact of Covid damaging its efforts in the first half of last year, resulting in a 40% drop in revenues. Hence the £50m loss for the first six months of 2020.
In the not-too-distant past, Lookers’ restructuring efforts were widely-reported, as was the closure of many of its sites and hundreds of redundancies. See also the investigation into a £19m ‘black hole’. And its potential merger with Pendragon didn’t go as well as many expected.
Despite these many knocks, Lookers’ CEO Mark Raban told the FT that he and his team feel the legacy issues are behind them and that they have reasons to be confident, commenting: “Going into 2021 there remains a high level of uncertainty in the wider environment, but we are confident that the group is now much better positioned for the longer term”.
Certainly the report issued on Friday pointed to Lookers’ ‘significant outperformance of the retail UK new car market’; that it was enjoying ‘continued resilient trading in used and aftersales, with increasing used car margins’; and that its H2 results, when they come, are ‘expected to be ahead of last year, largely offsetting H1 underlying loss before tax of £36.1m’.
Here’s what NTK Motors thinks: Lookers has long been a leading edge behemoth that the retail motor sector looks up to. But sometimes we need to remember the old adage ‘when America sneezes, the world catches a cold’. So, if a giant such as Lookers can go through such unpredictable and difficult times then the rest of us ought to take great care.