Car retailer Lookers set for record profits after pandemic boom

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Car dealership group Lookers is set to post record profits following the pandemic-fuelled boom in demand for new and second-hand cars.

However, the London-listed company also told investors on Friday that there is uncertainty over the availability of new vehicles and highlighted rising costs.

Shares in the company lifted after it said it expects to post an underlying pre-tax profit above market expectations of £82 million for the year to December.

Lookers said it plans to resume paying dividends as a result of the profit performance.

Mark Raban, chief executive officer, said: “2021 was an exceptional year for Lookers and we now expect to beat our previous estimates with record profit for the year.

“This is a great achievement by the whole team in a year which brought many external challenges, including Covid and vehicle shortages, demonstrating the strength of our proposition.

“With net cash at the year end, we have a strong balance sheet and good capacity to invest in future growth opportunities.”

Sales in the final quarter of the year “remained strong and above the board’s expectations”, it added.

The ongoing global shortage of semi-conductors however continued to place pressure on the supply of new and used vehicles.

The retailer said it is starting 2022 with an “excellent” order bank of new cars but said it remains cautious over potential supply issues.

“Given ongoing global supply chain disruptions, uncertainty as to the availability of new vehicles and the sustainability of used car margins at current levels, the board believes it is right to remain cautious,” the company said.

“The board is also conscious of general inflationary pressures and increased utilities costs, and is managing these risks through a continued focus on working capital management and tight cost control.”