Shares in car dealership Lookers have crashed after the company issued a profit warning and said the tough market would continue through the year.
Underlying pre-tax profits are now set to be £32 million for the first half, compared with £43 million in the comparable period last year.
Although the first quarter was positive, trading in the three months to June 30 was “increasingly more challenging” against a backdrop of declining new car sales in the UK.
Weaker demand in the used car market also affected performance.
Shares in the company were down 25% in early trading on Friday.
The board now expects that the recent trading conditions will continue throughout the rest of the year, with consumer confidence affected by the uncertainty over Brexit and the economy.
New vehicle supply restrictions and emissions regulations could also come into force during the third quarter.
The company added: “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.”
Adding to the uncertainty is an investigation by the Financial Conduct Authority (FCA) into its sales practices, which was announced last month.
Analysts at Liberum said more clarity was needed on the FCA outcome to assess long-term value in the business.
They added: “The market is clearly tough, but Lookers has seen a series of downgrades which suggest that it has lost some of the momentum which led to a track record of outperformance.”