Lookers makes return to dividends after 29% leap

Car dealership Lookers today posted record profits and paid its first dividend for more than two years.

First-half profits jumped 29% to £22.7 million after revenues grew 13.5% to £988.3 million and costs were slashed.

The company proposed a dividend of 0.6p a share, the first payment since the end of 2007, as it bounced back from the financial crisis and recession.

"Hopefully if we keep the ship going in the right direction, this will be the first dividend of many," said chief executive Peter Jones.

"We are making record profits in lousy markets. We are well placed for when the market recovers."

The profits were driven by a surge in demand for spare parts and repairs as many motorists opted to make do and mend.

New car sales rose a quarter to 32,469 as it benefited from the Government scrappage scheme, which propped up the industry in the recession. Scrappage, which gave buyers £2,000 towards a new car when they traded in an old model, has ended, raising fears the market will shrink again.

Sales of used cars continued to decline in the first half, down 6%, as motorists tightened their belts.

Chairman Phil White said: "The new and used car retail markets are likely to continue to be affected whilst economic conditions remain uncertain."