Lookers has delayed the publication of its accounts for 2019 and the first half of this year yet again – pushing them back to November.
In a trading update to the Stock Market this morning, Lookers said it does not expect to submit a request to restore the company’s shares for trading until after the publication of the results.
The group said it is still ‘working with auditors’ to finalise the accounts, which have been delayed four times and should have been published in March.
And no mention was made of the on-going fraud or FCA investigations.
The company also admitted the Covid-19 lockdown has hit profitability in the first half of the year and that it expects to post a loss for the first six months of 2020.
However, the troubled dealer group’s statement also updated share holders on its performance in Q3, which it said was ‘better than expected’ and should help ‘offset’ the first half losses.
On its Q3 performance, the company said: ‘This was underpinned by our significant outperformance of the UK retail new car market, robust like-for-like growth in both used car sales and aftersales revenues.
‘It also reflected the strengthening of used car margins and the cost saving and other benefits of our restructuring programme.’
New and used retail car sales combined were up 13.6 per cent on the same period last year with 42,000 cars sold.
New car sales were up 27.1 per cent and in September – although no specific figures were released for the month – it ‘performed well’.
Fleet sales were down 12.6 per cent on last year as the dealer group said it had withdrawn from ‘uneconomic activities’, but used car sales were up 6.2 per cent. Service revenue was also up 7.4 per cent.
CEO Mark Raban said: ‘Our decisive self-help measures, combined with better than expected trading in Q3 and strong support from our brand partners, have helped the group emerge from lockdown in a strong position.
‘Naturally, we remain cautious around the future outlook given the ongoing Covid-19 backdrop but we are well positioned to deal with any emerging challenges.’
Lookers said it remains focussed on driving cash flow and is looking at ‘portfolio management, cost reduction and the selective disposal of surplus property’.
The dealer group said it had managed to bring costs down 16 per cent and taking out government furlough cash and rates relief it was operating at costs nine per cent lower than last year.
Net debt currently stands at £22.5m – down from £132.6m in 2018 – and £12m for ‘disposals’ is expected to be received by the end of December.
With an eye to the future, the update added: ‘Q4 will benefit from the full impact of the group’s restructuring activity, however the board remains mindful of the ongoing uncertainty regarding Covid-19 and the possible impact on the UK car market.’
Disappointing
Mike Jones, chairman of ASE Global and the compiler of the Car Dealer Top 100 – our list of the most profitable dealers in the UK – said the delays were ‘disappointing’.
He said: ‘It is great to see Lookers making the most of the strong trading environment we saw in Q3 with profits in the quarter practically wiping out the losses generated in the first half of the year.
‘The fact that the 2019 accounts, along with the 2020 H1 interims, are further delayed to November is disappointing and there was also notably no comment on the progress of the FCA investigation.
‘The company needs both of these wrapped up ASAP to be able to draw a line under the previous regime and concentrate on profitable, forward-looking trading.’
Industry analyst Mike Allen, of Zeus Capital, told Car Dealer that although there were plenty of positives in the update it is still difficult for investors.
He said: ‘As indicated in August, it’s clear that Lookers has also participated in the recovery across the industry with September trading also strong.
‘It also looks like the trading performance in Q3 has largely offset the loss in H1, which is also positive.
‘The Q4 period should also see ongoing benefits from the restructuring measures taken during the year.
‘However, there are still plenty of unknowns and uncertainties. It is difficult for anybody to make a sensible investment decision/recommendation until the accounts are released and the full picture can be seen.’
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.
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.
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