Record annual profits for Lookers

The group, which has sites in the Black Country, Shropshire and Staffordshire, saw underlying pre-tax profit up from £13.7 million in 2020 to £90.1m primarily driven by margins on used vehicles.

Revenue was also up nine per cent from £3.69 billion to £4.05bn.

Chief executive Mark Raban said: "2021 was a record year for Lookers. We navigated another year of limited new vehicle supply and Covid-19 disruption. We have reported excellent profits and cash generation, through strong used car margins, continued focus on costs and the unstinting efforts of our people. We have successfully moved back to a net funds position in the business and have a strong balance sheet, underpinned by our property assets, supporting our investment capacity to grow the business.

"The business and our customers face some uncertainties in 2022. Trading in the first quarter has been strong despite new vehicle supply remaining tight. The current crisis in Ukraine and significant cost of living increases will put pressure on consumer sentiment and disposable incomes. However, the group is looking forward to the future with confidence. It has emerged from the challenges of the past couple of years stronger and with a clear strategy to navigate future challenges and drive value for all our stakeholders."

Statutory profit before tax also improved from £1.5m to £90m and a dividend has been reinstated with a proposed full year dividend of 2.5p per share, which the group intends to grow progressively.

Lookers has warned that the ongoing semiconductor shortage is likely to see new car supplies constrained for the remainder of 2022. Headwinds caused by high levels of inflation in areas such as utilities also mean the group will experience material cost increases.