12th Jul 2019 09:41
(Alliance News) - Shares plunged in Lookers PLC on Friday as it said it expects to see a drop in profit for the first half of 2019, and expects profit for the full year to be below previous expectations.
Shares in the automotive retailer dropped 23% to 35.65 pence on Friday.
Although trading in the first quarter to the end of March was positive, the second quarter ended June 30 was challenging, as the UK new car market continued its decline with registrations down by 4.6%.
In the used car market, weaker demand led to increased margin pressure, especially in June, during which Lookers said it had to take "a disciplined approach" to managing stock.
As a result, underlying pretax profit for the six months to the end of June is expected to be GBP32 million, down 25% from GBP43 million a year before.
Looking ahead, Lookers expects the challenging conditions to continue into the second half, stoked by continued weakness in UK consumer confidence due to political and economic uncertainty.
There also is a possibility of new vehicle supply restrictions as new emissions regulations come into force in the third quarter of 2019, Lookers warned. In addition, earnings will continue to be hit by the retail sector cost inflation experienced in the first half.
As a result, Lookers expects underlying pretax profit for 2019 to be below previous expectations.
Lookers will report its interim results on August 14.
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