7:40 am, September 20, 2020
A potential buyer of Lookers would need to see under the rug and understand the full story before shelling out, believes an industry analyst.
Investment specialist Mike Allen, of Zeus Capital, told Car Dealer Live that just who will be in the running to buy the troubled dealer group is hard to call.
Lookers has still not made its annual results for last year public after a series of delays and is battling an internal fraud and FCA investigation.
In the interview, which you can watch in full above, Allen said: ‘A rational buyer would need to understand what the FCA liability is, and a rational buyer would need to understand the fraud is being dealt with as well, and then probably need to see the interims to get that curve in place, in terms of how much was lost during lockdown and what the recovery curve has been like.
‘To make a decision on something, you’d really have to look at the debt in the business.
‘We know Lookers has been trading well, but a rational buyer would need to understand the position regarding the underlying net debt.’
But he added: ‘Lookers is a good business and it has been a good business in the past. There’s a core of great dealerships, brands and people in that business, so there is value no doubt.’
How quickly does Lookers need to draw a line under everything and move on?
‘I think they would have loved to have done that in July and August if they could have,’ said Allen.
He pointed out that practicalities were overriding willingness, and agreed that Lookers had been taking part in the recovery, but said: ‘They’ve got to get those accounts out and then obviously the interims really probably need to be out next month as well if they can.’
Watch the interview in full by clicking on the main image.
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