Car retailer and aftersales service group Lookers says it expects underlying profit before tax for the first half 2019 to be £10 million down compared to the previous year.

And the company – which has a Volkswagen dealership at Rosehill Industrial Estate in Carlisle – said it expected the “recent challenging conditions” to continue into the second half of the year due to a “weakness in consumer confidence in light of wider political and economic uncertainty”.

Lookers said the period until June 30 had started “satisfactorily” but grew more challenging in the second quarter with new car registrates down by 4.6 per cent compared to the same period in 2018.

The company said weaker demand meant it had been forced to take a “disciplined approach” to managing stock in light of significant increase in margin pressures in the used car market.

It was also experiencing cost inflation pressures affecting the general retail sector, it said in its half year trading update.

“The Board now expects that the more recent challenging conditions are likely to continue into H2, exacerbated by continued weakness in consumer confidence in light of wider political and economic uncertainty, and further pressure on used car margins,” it said in a statement to the London Stock Exchange.

“There is also the possibility of new vehicle supply restrictions as new emissions regulations come into force during Q3. In addition, the retail sector cost inflation experienced in H1 is likely to continue to impact earnings during the second half of the year.

“As a result of the above factors, the Board's current outlook for underlying profit before tax for the full year is now below its previous expectations.”

However, the company did say its balance street remained “strong” with a fully committed £250m revolving credit facility in place until March 2022 and net assets totalling.

“Notwithstanding these short-term challenges, the board continues to believe that over the long term the group is extremely well positioned to take advantage of the many opportunities ahead as the sector continues to develop, underpinned by the group's strong balance sheet and cash generation,” it added.

Lookers is set to deliver its half year results on August 14.

Meanwhile, the company said it “continues to co-operate fully” with a Financial Conduct Authority investigation into its sales processes between January 1, 2016 and June 13, 2019.