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Lookers predicts annual profit well ahead of forecasts

Thu 08 April 2021 08:17 | A A A

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(Sharecast News) - Lookers said it expected annual profit to be "materially" better than market expectations after a strong first quarter and with showrooms about to reopen.

The car dealer's showrooms were shut throughout the first quarter but it sold 49,000 through digital channels compared with 49,000 sales a year earlier. Combined with resilient aftersales performance and cost control this led to first-quarter performance beating expectations.

Lookers said it significantly outperformed the wider market for new car sales. Its unit sales were flat in the first quarter compared with a 12% drop in new UK car registrations. Like-for-like sales of used vehicles fell 6%. Values held up well and margins improved.

As a result, annual results are likely to be well ahead of consensus expectations for annual underlying pretax profit of £22.6m the company said. Lookers shares jumped 10.8% to 69.4p at 08:36 GMT - their highest value since mid-2019.

Lookers' showrooms are due to reopen on 12 April along with other non-essential retail stores. Some economists have predicted a spending splurge on items such as cars by people who have saved money during lockdowns.

"Given ongoing uncertainty around both Covid-19 and consumer sentiment, the board believes it is right to remain cautious about the outlook for the remainder of the year," Lookers said. "However, based on the better than expected performance in Q1, the board's expectation for underlying profit before tax for the full year ended 31 December 2021 is now materially ahead of the current analyst consensus."

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