Lookers sees average new car selling prices rise nearly 13%

Car dealership group Lookers has upped profit expectations after its average selling prices for new cars rose by nearly 13 per cent last year.

Group revenues increased thanks to higher new vehicle costs for motorists, offsetting a 5.8 per cent decline in new and used cars sold over the period compared to the previous year. 

The group bolstered its vehicle finance sales and saw profit margins increase across its leasing in 2022.   

Higher prices: Lookers saw average selling prices for new cars rise by nearly 13% last year

The London-listed firm’s revenue for the year rose to £4.3billion, up from £4.1billion in 2021.

Its underlying profit before tax fell to £82.7million for the 12 months ending 31 December, against a record £90.1million the previous year. 

The company’s top brass said last year’s performance was primarily driven by new and used vehicle ‘market outperformance and cost control’.

Directors at Lookers proposed a final dividend of 2p per share, representing a 20 per cent increase compared to 2021.

The group  had a net cash stash of £66.5million and a property portfolio with a net book value of £290.5million at the end of the year. 

Looking ahead, Lookers reported an ‘excellent start’ to the first quarter, with underlying profit before tax ahead of 2022. The group said it stood ready to make acquisitions in a bid to bolster its portfolio. 

It is also ploughing ahead with plans to develop a new used car ‘destination centre’ called Lookers Car Hub. The standalone multi-franchise used car offering is expected to open in Middlesbrough during the final quarter of this year.

Lookers also said it had continued to generate cash in the last few months, with net cash of £93million as at 31 March.

But, the board said it remained mindful of ongoing trading headwinds, including economic uncertainty, inflationary pressure, and both supply and logistics woes.

Despite those challenges, board expectations for underlying profit before tax for 2023 are now ahead of its previous forecasts.

‘I am delighted to report another excellent performance achieved against a backdrop of material supply disruption, inflation and rising interest rates,’ chief executive Mark Raban said.

‘We remain mindful of pressures faced by the consumer and on discretionary spending.’

Lookers shares rose today and were up 1.88 per cent or 1.60p to 86.60p this afternoon, having fallen around 9 per cent in the last year.

UK new car sales rise over 18%

The UK’s new car market grew for an eighth consecutive month in March – and electric vehicles saw a record month of demand, latest industry figures published today revealed.

Registrations grew year-on-year by 18.2 per cent, the Society of Motor Manufacturers and Traders (SMMT) confirmed. 

Battery electric vehicle (BEV) deliveries reached a record monthly high of 46,626, representing growth of 18.6 per cent, the figures show. 

This was the best ‘new plate month’ performance since before the pandemic – with March and September traditionally the busiest times for motor traders due to the arrival of the latest registration plate numbers – but industry insiders warn that the ‘positive’ headline numbers ‘mask a worrying decline’ in demand from the public.

A total of 287,825 new vehicles entered our roads last month – an increase from 243,479 in March 2022. 

Mike Hawes, SMMT Chief Executive, said: ‘March’s new plate month usually sets the tone for the year so this performance will give the industry and consumers greater confidence. 

‘With eight consecutive months of growth, the automotive industry is recovering, bucking wider trends and supporting economic growth.’