Car dealership chain Lookers swung to a £50 million loss in 2020 as Covid-19 forced its showrooms to close for large parts of the year.
The company said its pre-tax loss followed a profit of £19.6 million in 2019.
It was a big hit for the business, which also saw a 40% fall in revenue to a little over £1.6 billion in the financial year, down from £2.6 billion a year earlier.
But Lookers signalled that it had seen a more hopeful second half, and expects performance over the last six months to be ahead of 2019, partly offsetting the awful first half.
“Trading in the second half of 2020 was encouraging, underpinned by significant outperformance of the retail UK new car market, continued resilient trading in used and aftersales, and increasing used car margins,” the business said.
It is also set to make some financial gains from a restructuring programme, which included closing 12 showrooms and making 1,500 people redundant.
Chief executive Mark Raban said: “2020 was a challenging year for Lookers, managing the impact of the Covid-19 pandemic and a number of legacy issues facing the group, which required significant action to restructure and improve the business for the long term.
“Despite a resilient sales performance, the benefit of government support and prompt action taken to manage costs, in the first half we incurred a significant loss in a very difficult period for the car retail industry.”
He added: “Although various restrictions continued into the second half of the year, trading improved significantly, benefiting from the material cost-saving measures implemented earlier in the year and enhancements we have made to our retail offer, including the capability to carry out contactless vehicle sales.”
The board said it is still cautious about the outlook for 2021. England is currently in lockdown, and showrooms once again closed. However, this will be in part mitigated by Lookers’ click-and-drive service, it said.
Mr Raban added: “Going into 2021 there remains a high level of uncertainty in the wider environment, but we are confident that the group is now much better positioned for the longer term and can capitalise on the various opportunities ahead, not least in electrification and digital developments.”
The company will not pay out any dividend for the last year due to the Covid-19 crisis, but the board said it will reinstate the payments as soon as is prudent.