Lookers has reached an agreement with a consortium of banks to extend its credit facility until September 2023.
Crunch talks with banks have been ongoing throughout the Covid crisis about extending the facility after ‘going concern’ issues were raised last year.
In an announcement to the stock market this morning (May 25), the dealer group confirmed a revolving facility is now in place for £150m.
Previously, the group had a £250m facility.
The group said: ‘The recent renewal of its bank facility is an important step for the group and for the completion of its audit for the year ended December 31, 2020.
‘Year-end procedures with new auditors BDO LLP are progressing as planned, and the group will release its audited preliminary results for the year ended December 31, 2020 in the second half of June.
‘Whilst recognising that uncertainty remains in relation to Covid-19, consumer sentiment and some new and used supply constraints, we now expect underlying profit before tax for 2021 to comfortably exceed current market consensus.’
Analysts expect underlying profit before tax for the group in 2021 to be around £34m.
The group said once its annual results had been published it intends to return to a normal reporting schedule with interim results in September.
Lookers has been battered by a series of issues in the past two years – and has consistently delayed financial reports. Its shares were suspended last July because it missed key deadlines.
Today’s update also revealed that the group has continued to ‘build on the momentum’ of the first quarter of the year.
The group added: ‘Trading has been strong since the reopening of our dealerships on April 12.
‘We have benefited from strong consumer demand combined with significant market outperformance.
‘We have also seen improved gross margins and the ongoing benefit of our cost reduction initiatives.
‘Customers continue to react positively to our enhanced omni-channel offering.’
Lookers didn’t reveal any financial figures as part of the announcement but did say its new car sales were up 32.6 per cent and used car sales up 32.5 per cent compared with the same four months to the end of April last year.
Aftersales revenue was up 25.4 per cent and new fleet sales up 20.5 per cent.
Lookers chief executive Mark Raban said: ‘It’s encouraging to see our strong trading momentum continuing with a very positive customer response following the reopening of our dealerships.
‘The steps we have taken to evolve and enhance our digital offer are being well received and we have a number of further developments in the pipeline.
‘I would like to thank the fantastic Lookers team for their considerable efforts in what has been a very busy period for the business.
‘We are pleased to have renewed our banking facility and thank our banking partners for their continued support.’
Mike Jones, director of Fresh Tracks Holdings, told Car Dealer: ‘The renewal of the bank facility is clearly good news for Lookers and is a key step in order to avoid the issues seen in 2020 with the delay to the audited accounts and resulting suspension in share trading.
‘It is also good to see a strong trading performance, with significant growth across the board compared with the first four months of 2020, despite the showroom closures we saw for the majority of 2021.
‘Compounded with the improved gross margins and cost reductions noted in the update, this should produce a significant profitability improvement.’
Lookers plans to hold its AGM in person on June 30 at the Radisson Blu Hotel at Manchester Airport.
Lookers timeline: What’s happened when?
Click on the date to read the full story
April 9, 2021 – Motor trade analysts upgrade their forecast for Lookers as share price jumps again
April 8, 2021 – Lookers reveals its performance for first quarter of 2021 was ahead of board expectations in unscheduled announcement to Stock Market.
March 18, 2021 – Lookers said it expects to make a profit before tax of around £10m for 2020 – up from £4.2m for 2019 as it reveals talks with banks are ‘progressing’.
March 15, 2021 – Lookers’ previous auditors Deloitte under investigation by Financial Reporting Council of its work on the group’s accounts in 2017 and 2018.
March 2, 2021 – FCA investigation closed and no fine imposed on Lookers. FCA expressed ‘concerns’ relating to ‘historic culture, systems and controls’, but said no further action would be taken.
January 29, 2021 – Lookers revealed it lost £36.1m in the first half of 2020. The interim results led to shares being relisted on London Stock Exchange. They immediately rose 77 per cent.
January 6, 2021 – Lookers appoints Anna Bielby as interim chief financial officer, but there was no news on the delayed interim results.
December 29, 2020 – A third of shareholders vote against Lookers directors’ remuneration packages – including CEO Mark Raban’s £450k salary – at a general meeting.
December 18, 2020 – Lookers tells investors that its interim results, promised to be delivered before the end of the year, will now not be published.
December 9, 2020– Lookers reveals interim CFO Jim Perrie has quit early and says it is ‘unlikely’ the interim results will be out before the end of the year.
November 25, 2020 – Lookers finally releases its annual accounts for 2019 showing a statutory loss for 2019 of £45.5m. Promises interim results in December and the hopeful reinstatement of shares on Stock Market.
October 31, 2020 – Long-standing Lookers non-executive director Tony Bramall, one of the group’s major investors, brings forward the date he will leave the board to the end of December. No reason is 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 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 and 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 that 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.