Lookers’ operating profits took a hit in 2008, falling from £40 million to £33.9 million, before exceptional one-off costs put it into the red.

According to the group’s preliminary results, exceptional costs drove the business to a £14.9 million loss before tax. But despite the dip in profits, revenues increased from £1.68 billion to £1.78 billion. 

In 2007 Lookers reported a profit of £23 million. 

Lookers has undergone a cost-cutting exercise which saw 21 dealerships closed between April 2008 and March 2009 and a further seven sites have been dual franchised, at a total one
off exceptional cost of £14.1 million. These measures will save Lookers £12 million a year.

The group is left with 120 sites across 30 franchises in 79 locations. While new car sales dropped by 12% across the UK for Lookers during 2008, its aftersales and FPS parts operations delivered profit growth of 5% and 8% respectively.
The company also reduced its used car stocks by
£31 million in order to match sales rates and stock turn. 

Lookers is renegotiating its financing structure and is hoping to finalise the details by May 31 to secure a deal until April 2012.

David Dyson, Lookers financial director, told AM: “2008 was a year to its own. We feel we are on the other side of the restructuring process now, but you can never say never.

“The only thing that’s not going how we want is new cars. The market just isn’t there at the moment. Maybe the scrappage scheme will help, but time will tell.”

Dyson said the Lookers network was still waiting for the finer details about the scrappage scheme, but said all of the network was “pretty much ready to go”. 

Despite a difficult year, the group is thinking positively for this year and is already ahead of where it was during the first quarter of 2008.

Ken Surgenor, Lookers' chief executive, said: “Our results are resilient considering the difficult financial backdrop. 

"The action we have taken in 2008 has resulted in like- for-like cars sales for the first three months of 2009 being 7.5% ahead of the market. 

"We are still focused on managing costs and will continue to take measures where appropriate which will see our cost base fall further.”