Lookers expects to be hit by a temporary suspension of shares trading after conceding that its 2019 annual financial results will not be published in time for the Financial Conduct Authority’s (FCA) June 30 deadline.
The troubled AM100 retail group revealed that additional procedures must be completed by itself and its auditor, Deloitte, in light of a report into the findings on a company-wide investigation into alleged fraud activities, before the results can be finalised.
Today’s statement, issued via the London Stock Exchange today (June 8), said: “After consultation with the FCA, if the 2019 Results are not published by 30 June 2020 the Company anticipates that trading in the Company’s shares will be temporarily suspended with effect from 7.00am on 1 July 2020 until publication of the 2019 Results.
“The Company’s priority and focus is the production of the 2019 Results at the earliest possible date and by no later than the end of August 2020.”
Lookers added that Deloitte had taken the decision to resign it post as group auditor following the completing of the 2019 results.
In April Lookers said that it expected one-off charge of over £4 million in its 2019 financial results as a result of the investigations findings which, at the time, had identified certain misrepresented debtor balances in respect of bonus receivables together with a number of fraudulent expenses claims.
Last month the group also revealed that it was embarking on a restructure which would see it shed 1,500 jobs and close a further 12 car dealership sites (15 were closed in last 2019 as part of a plan unveiled in November).
Today’s statement, issued via the London Stock Exchange, said that the draft report into the fraud investigation, completed by Grant Thornton, was nearing its completion and that a draft had been shared with the Company’s auditors, Deloitte, for review in the context of their audit opinion.
However, said discussion surrounding the report concluded that further procedures needed to complete the group’s annual results for the period to December 31, 2019.
June 30 is the last date permitted for publication of the 2019 results under the FCA’s Disclosure Guidance and Transparency Rules (as modified by the temporary relief granted to all listed companies by the FCA on March 26, 2020).
Lookers said: “The Board and the Company’s finance team is working closely with Deloitte and is developing an action plan to ensure that the additional work required to allow publication of 2019 Results is completed as soon as possible.
“Deloitte has indicated to the Company that it intends to resign as auditor following the publication of the 2019 Results.
“The Company is currently engaged in a competitive tender process to appoint a new auditor.”