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Comment: It’s time for Lookers to finally resolve this plot saga that rivals EastEnders

Time 12 months ago

It’s a saga that would rival a plot of EastEnders. 

Boardroom departures to fraud investigations, probes into selling practices to delayed accounts, no one really knows where the plot will twist next for Lookers.

I mean, we’re probably only one step away from someone shouting ‘RICKY!’ across the Lookers boardroom table.


Delving back over the past year to create a timeline of events for the troubled dealer group was pretty revealing. Even without Covid-19 and Brexit, Lookers have had a rather tumultuous 18 months to say the least.

Investors must be pretty cheesed off. Shares were suspended in the dealer group at the start of July 1 at 21p – they’d fallen pretty consistently to that since the summer of 2019 – and there’s no word on when they’ll be traded again.

And remember this was a dealer group that posted stellar profits of £85.5m in 2018 on turnover of £4.8bn.

But how much of that was right? The internal fraud investigation has already said it will have to restate previous year’s numbers as it looks carefully at how the group has accounted for manufacturer bonuses.


Just how far back will that go?

In its interim results for the half year 2019, the group said it made £39.7m. Pretty impressive, but we’ve had no further guidance on how the remainder of the year performed.

And just how far that number will drop following this fraud probe is unclear – but the board is insistent it will remain profitable on an underlying basis. 

You’d hope so too. A swing, even from £39.7m, into a loss would be quite unnerving to put it mildly.

You’ve got to feel for Lookers. Whatever has gone on it’s working hard to unravel the mystery and at the same time deal with a global pandemic that has caused enough headaches for the motor trade. That must be like negotiating algebra homework with a hangover.

And what with Brexit looming on the horizon, and the potential for more stringent Covid-19 restrictions in the dark winter months, Lookers really could do with some Alka Seltzer and a little lie down.

Whether we’ll see the accounts next week or not, one thing is for sure – it needs to lance the boil. 

Getting the numbers out will hopefully allow it to draw a line under a sorry saga and move on.

In August, the group said trading in June and July had been strong, but we’re due a much more detailed update from them. 

We’ve had briefings from Vertu, Marshall and Pendragon and really could do with one from Lookers now.

Perhaps next week we’ll get them both – a trading update and the accounts finally released. 

Or will the motor trade be left with yet another cliffhanger? 


Timeline

August 20, 2020 – Accounts delayed for the fourth time and no promise given as to when they’ll be published.

June 9, 2020 – Lookers says it will suspend shares on July 1. Delays accounts for third time and says they’ll be published ‘no later than the end of August 2020’.

June 5, 2020 – Lookers says it will axe 12 dealerships, cut 1,500 jobs.


May 2020 – Pendragon CEO Bill Berman admits he wrote to Lookers to discuss a merger and updates Stock Market to that effect. Move described as ‘two drunk men bumping into each other in a bar’.

April 2020 – Fraud investigation deepens. £4m charge revealed and firm says there could be more. Delays accounts to June.

March 12, 2020 – New chief operating officer Cameron Wade leaves role after only a month in post

March 11, 2020 – Lookers delays results saying in final stages of preparation ‘potentially fraudulent transactions’ in one division were discovered. Promises results in April.

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November 2019 – Chief executive Andy Bruce and chief operating officer Nigel McMinn leave firm abruptly

June 2019 – FCA launches review into sales processes at Lookers between January 2016 and June 2019. Lookers cannot ‘estimate what effect, if any, the outcome of the investigation may have’.

December 2018 – Lookers launches independent internal audit into sales process. It eventually finds ‘control issues’ in sales process where ‘improvements’ are needed. Findings handed to FCA.

 

James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

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