Lookers, a prominent car dealership, reported a significant financial downturn in 2023 after a major private acquisition.
- In 2023, Lookers experienced a pre-tax loss of £5 million, contrasting a £73.9 million profit in 2022.
- Despite increased revenue, Lookers was impacted by economic variables and acquisition-related changes.
- The dealership saw an uptick in both new and used vehicle sales during the fiscal year.
- Inflationary pressures and rising interest rates contributed to increased operational costs for Lookers.
Lookers, headquartered in Cheshire, disclosed a pre-tax financial loss of £5 million in 2023, marking a stark decline from a pre-tax profit of £73.9 million achieved in 2022. This shift follows a substantial take-private transaction valued at over £500 million, which resulted in the company’s delisting from the London Stock Exchange. Despite these developments, Lookers reported an increase in revenue from £4.31 billion to £4.59 billion over the past year, underscoring a complex financial picture.
The dealership’s vehicle sales figures reflected noteworthy growth, with 97,218 new vehicles sold, a 15.8% increase, and 80,880 used vehicles sold, marking a 2.2% rise compared to the previous year. According to an approved board statement, all revenue channels saw growth, driven significantly by fleet and commercial vehicle sales. It was highlighted that the easing of supply constraints, particularly concerning the semiconductor shortages experienced in 2022, facilitated this uptrend.
Lookers attributed a decrease in used vehicle margins to the resurgence in new car supply, which competed with previously constrained markets. This dynamic posed challenges to maintaining profitability, as the influx of new vehicles altered the profitability landscape. Additionally, inflationary challenges impacted the company’s financial health, reportedly inflating their cost base by £14 million and leading to a corresponding rise in operational expenses.
Moreover, the economic environment, characterised by increasing interest rates, resulted in a £17 million increase in finance-related costs. Lookers’ financial strategy and outcomes were significantly influenced by these macroeconomic factors, highlighting the broader impact of fluctuating economic conditions on business performance.
Despite achieving revenue growth, Lookers faced financial headwinds, leading to a notable pre-tax loss for 2023.
