After a recent £504m take-private deal, Lookers has reported a pre-tax loss, reflecting substantial financial turbulence.
- The Cheshire-based dealership experienced a decline from a £73.9m profit in 2022 to a £5m loss in 2023.
- Despite economic challenges, Lookers’ revenue saw a positive increase over the past financial year.
- Sales of new and used vehicles rose, yet profitability was hindered by several external factors.
- Inflation and rising interest rates significantly impacted Lookers’ financial outcome, increasing operating and finance costs.
Following a significant £504 million take-private deal, Lookers, a prominent car dealership, has reported a notable financial setback. The company, headquartered in Cheshire, has recorded a pre-tax loss of £5 million for the year 2023, a stark contrast to the £73.9 million profit in 2022. This transition from public to private ownership was completed in October of the prior year, resulting in Lookers being delisted from the London Stock Exchange.
Despite the apparent downturn, Lookers achieved an increase in revenue, climbing from £4.31 billion to £4.59 billion over the past year. Vehicle sales contributed to this growth, with new vehicle sales rising by 15.8 per cent, totaling 97,218 units sold. Meanwhile, used vehicle sales also experienced a modest increase of 2.2 per cent, reaching 80,880 units sold.
The company’s board emphasized the strong trading performance, highlighting revenue growth across all channels. A definitive factor in the growth of new vehicle volumes was the rebound in fleet and commercial vehicle sales, following eased supply constraints in 2023. In contrast, the previous year’s semiconductor shortage had forced original equipment manufacturers to prioritize the more lucrative retail channel at the expense of fleet and commercial vehicle volumes.
Despite these successes, the return of new car supply impacted used vehicle profit margins negatively, contributing to an overall decline in gross profit. Additionally, inflationary pressures added £14 million to Lookers’ operational costs, compounding the financial challenges. The company also faced a £17 million spike in finance costs due to increased interest rates.
As a result, Lookers continues to face significant financial headwinds despite its operational achievements and revenue growth.
Lookers’ recent financial performance underscores the complexities and volatility of the automotive industry amid broader economic challenges.
