Taggarts car dealership owner hails record profits

CAR dealership owner Lookers hailed a record year despite coronavirus and new vehicle supply constraints.

The company, which owns the Taggarts car dealership chain in Scotland, said pressures stemming from Covid-19, the invasion of Ukraine and the UK’s cost of living crisis are set to continue, but that it “looks to the future with confidence” in its preliminary results for the year ended December 31, 2021.

Underlying profit before tax was £90.1m compared to a restated total of £13.7m in 2020, largely driven by used vehicle margins.

A shortage of semiconductors that is impacting the supply of new cars is expected to continue for the rest of this year and inflation and energy price headwinds will drive cost increases, but the company has said she was “well positioned for the remainder of 2022”.

Group revenue rose 9% to £4.1bn from £3.7bn the previous year.

He has also proposed an annual dividend of 2.5 pence per share, which he intends to increase “gradually”. Lookers’ 83,000 sales in 2021 gave it just over 1% of the market.

He said his financial performance had been further improved by actions taken in recent years to restructure the company.

The company said: “There have been other favorable dynamics including strong demand for used vehicles in light of a limited supply of new vehicles and an aversion to public transport due to Covid-19, which contributed to a strong margin performance.”

Mark Raban, chief executive of Lookers, said “2021 was a banner year for Lookers” during the earnings presentation.

“We have gone through another year of limited new vehicle supply and Covid-19 related disruptions,” Raban said. “We have had excellent earnings and cash generation, thanks to strong margins on used cars, a continued focus on costs and the tireless efforts of our people.

“We have successfully returned to a net equity position in the business and have a strong balance sheet, backed by our real estate assets, supporting our ability to invest in growing the business. The business and our customers face certain uncertainties in 2022.”

READ MORE: New car shortage set to continue

Trading in the first quarter was strong despite new vehicle supply remaining tight, he said. “The current crisis in Ukraine and the significant increase in the cost of living will put pressure on consumer confidence and disposable incomes,” Raban said. “However, the group looks to the future with confidence.

“He emerged from the challenges of the past two years stronger and with a clear strategy to meet future challenges and create value for all our stakeholders.”

Separately, Motorpoint revealed an 82% rise in sales to £1.32billion for the year to March, but warned that “the impact of rising inflation and global challenges in terms of vehicle supply” is likely to affect its performance.

Pendragon warned last week that Putin’s war on Ukraine could exacerbate the shortage of new vehicles, driving up prices in the market and helping this dealership also post record profits for 2021.

Pendragon’s revenue for the year to end December rose 18% to £3.44bn while profits jumped more than 900% to £83m from £8.2m previously.

Lookers also said, “This financial and operational performance gives us a solid platform from which to refresh our strategy. We are embarking on this path with a strong balance sheet, which allows us to pursue and invest in new opportunities from a solid foundation.

Shares of Lookers closed down 4.17%, or 4p, to 92p.