Under-offer Lookers nets £46m profit amid tough economic headwinds
Car dealership Lookers, which looks set to be swiped from London markets in a £504m take-private deal, reported resilient trading in the first half against significant macroeconomic headwinds.
The UK’s biggest car seller reached an agreement late last month with Global Auto Holdings – an entity linked to the Canadian Alpha Auto Group – to sell itself for 130p per share, pending investors’ approval.
Amid the speculation, Lookers said today that half-year profits had broadly levelled out at £46.1m, a slight dip from £47.2m in 2022.
The Altrincham-based retailer reported a jump in revenues of 8 per cent year-on-year to £2.42bn, as it benefitted from improving vehicle supply following years of pandemic-induced supply chain snarl-ups.
Mark Raban, chief executive officer, said “against significant macroeconomic headwinds the group has once again delivered a good trading performance. I would like to thank the entire Lookers team for their amazing contribution and dedication to the company.”
Turnover from new vehicles remained strong in the first half, reaching £1.1bn up from last years £976.1m and coinciding with 11 consecutive months of growth in the new car market.
Used vehicle revenues, meanwhile, levelled out at £1.27bn as values softened amid a surge in supply and following the markets best start to a year since 2020.
It comes after a strong few years of trading for the dealer group, which raked in record profits last year as pent-up demand after the pandemic collided with a surge in the price of new and second hand vehicles.
Economic headwinds including Bank of England rate hikes, inflationary pressures and the ongoing cost-of-living crisis have tempered the firms’ outlook, however.
The takeover deal for Lookers has dominated newspapers in recent weeks and would bring an end to 50 years of trading as a public company.
It was initially blocked by major shareholder Cinch, but is now back on the table and awaits shareholder approval, following a sweetened offer in July.
According to a letter of intent published on the stock exchange today, the number of shareholders willing to accept the bid has reduced to just over 85m, representing approximately 22.3 per cent of Lookers’ share capital.
Raban added: “the Board unanimously recommends the cash offer for Lookers by Global Auto Holdings Limited at 130p per share, which represents a premium of approximately 61 per cent.