13th Mar 2019 10:04
LONDON (Alliance News) - Lookers PLC on Wednesday increased its dividend by 5.0% for 2018, after reporting a steady rise in annual revenue but a drop in profit.
The UK motor retail and aftersales service group reported a pretax profit of GBP53.1 million, down 9.0% from GBP58.4 million the year before, as operating profit declined to GBP73.6 million from GBP77.4 million in 2017.
On an adjusted basis, pretax profit dipped by 3.0% in 2018 to GBP67.3 million from GBP68.4 million.
Lookers said that during the period, a number of businesses within its dealership portfolio were closed, leading to extra costs.
In addition, the group said volumes in the UK new car market fell by 6.8% to 2.4 million cars, affected by a shortage of supply caused by the implementation the worldwide harmonised light vehicle test procedure in the wake of the Volkswagen AG diesel emissions cheating scandal.
Despite the market shrinkage, Lookers' revenue grew by 4% to GBP4.88 billion from GBP4.69 billion.
Used car turnover rose by 14% both on an absolute and like-for-like basis, while Aftersales revenue rose by 6.0%, and 7.0% on a like-for-like basis. However, new car turnover declined by 3.3%, and 3.0% on a like-for-like basis.
Lookers declared a final dividend of 2.60 pence per share, bringing the total payout to 4.08p, up 5.0% from 3.89p in 2017.
Looking ahead, Lookers said it made a good start to 2019, with its order book for new cars in March continuing to build in line with management expectations. Used car volumes have continued to show growth and Aftersales is seeing further opportunities.
"We have produced a resilient set of results against a backdrop of more challenging conditions in the motor sector, increasing sales and maintaining profitability. In particular, growth in our used car and aftersales divisions has helped to offset the impact of a more muted new car market, demonstrating the resilience of our business model," said Chief Executive Andy Bruce.
Shares in Lookers were down 2.5% at 99.50 pence on Wednesday.
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