Lookers can ‘look to the future with confidence’ its executive chairman has said, after a turbulent 12 months.
The dealer group finally released its accounts for 2019 today (Nov 25) that showed a significant drop in profits.
Lookers experienced a cash expenses fraud in a single division of its business and is currently undergoing an investigation by the FCA.
The business also had to take ‘difficult but necessary decisions’ in the 2019 financial year ‘to implement the right dealership portfolio and staffing profiles’, it said in an announcement to the Stock Exchange.
Looking at its 2020 trading and outlook, Lookers said the first national lockdown had a ‘significant’ impact on its financial performance, with the bosses expecting to report a material underlying loss before tax in H1.
The firm said its Q3 trading was ‘better than expected with underlying profit-before-tax significantly ahead of last year’ and that Q4 trading will ‘benefit from the full impact of the group’s restructuring activity’ but the second lockdown in England and regional impacts will affect its financial performance.
- Lookers reveal significant drop in profits for 2019 as much-anticipated 2019 results finally released
Lookers said its net debt has improved during the year and was £54.4m at the end of October (£59.5m at end December 2019). It has also agreed revised covenants with its banks and is currently in discussions to refinance its £250m banking facilities which are in place until March 2022.
The statement to the Stock Exchange also said ‘activity is underway to enhance systems, controls and policies and procedures to prevent recurrence of the issues which led to the adjustments to our accounts’.
Phil White, executive chairman said: ‘We emerged from the initial lockdown in a strong position and are well equipped to deal with the second lockdown in England.
‘We have an industry leading portfolio, underpinned by a talented and dedicated team which means that we can look to the future with confidence.
‘My focus now is to restore the listing of our shares and to strengthen the board to take advantage of the many opportunities that lie ahead for Lookers, which is fundamentally a great business.’
Lookers also said it will publish its full annual report and accounts for the year end December 31, 2019 within two working days, and will publish its interim results for 2020 as ‘soon as possible in December’.
Lookers timeline: What’s happened when?
October 31, 2020 – Long standing Lookers non executive director Tony Bramall, one of the group’s major investors, bought forward the date he would leave the board to the end of December. No reason was given for his early departure.
October 19, 2020 – Lookers updates market on performance in Q3, but still no word on its 2019 accounts or the FCA investigation. Analysts expect results to be out before December.
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.
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.