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Lookers share trading suspended after fraud probe delays 2019 results

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Trading of Lookers shares has been temporarily suspended after a company-wide fraud investigation delayed publication of its 2019 annual financial results.

AM reported at the start of June that the AM100 2019’s second-placed car retail group expected to be hit by a temporary suspension of shares trading after conceding that its 2019 annual financial results will not be published in time for the Financial Conduct Authority’s (FCA) June 30 deadline.

Today (July 1) the move was confirmed, with a statement issued via the London Stock Exchange confirming that share trading had been temporarily curtailed.

Shares in the business were suspended at a value of 21p this morning, 88.6% down on its December 2015 peak of 185p.

The news follows Monday’s (June 29) announcement that the cause for the delay with Lookers’ financial results – a fraud investigation covering its entire UK operations – had uncovered a £19 million accounts ‘black hole’.

The group said that the sum had resulted from overstated supplier bonuses, fraudulent expenses claims and the inconsistent application of policies, processes and accounting standards over several years.

Today’s statement regarding Lookers suspended share trading activities said: “As announced on 8 June 2020,  the Company and Deloitte LLP concluded that the additional procedures that they needed to perform to finalise the company's audited financial statements for the year ended 31 December 2019 meant that it would not be possible for the Company to publish the 2019 Results by 30 June 2020.

“As 30 June is the last date permitted for publication of the 2019 Results under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules (as modified by the temporary relief granted to all listed companies by the FCA on 26 March 2020), following consultation with the FCA, the company has requested that the listing of the company's ordinary shares be temporarily suspended with effect from 7.30 a.m. on 1 July 2020 until the publication of the 2019 Results.”

Lookers said that it intends to request a restoration of its listing on publication of its 2019 results, adding: “The company's priority and focus is the production of the 2019 Results at the earliest possible date.”

Lookers announced at the start of June that it planned to close a further 12 car dealerships and make up to 1,500 redundancies as part of a restructure plan targeting annual savings of £50 million.

The move comes eight months after the group announced followed-up a profit warning with its "portfolio consolidation" plan to close 15 dealership locations.

Last week it also announced a shake-up of its board as it searched for "new skills and experience".

Senior independent director, Richard Walker, and Sally Cabrini, the non-executive-director and chair of Lookers’ Remuneration Committee, did not stand for re-election at Monday’s annual general meeting.

AM webinar: The AM Motor Retail Review (Monday July 6 at 2pm)

This 45-minute webinar will discuss the UK motor retail industry’s achievements in the first month of trading since lockdown ended for England’s car dealers, including:

· June’s new car registrations and used car opportunities.

· The lessons learned from social distanced trading.

· How dealers balance the return to trading and their need to limit their costs.

· Prospects for Q3 and critical steps for success.

Chaired by AM editor Tim Rose, his invited guests will include senior executives of AM100 dealers, suppliers and OEMs, who’ll share their own experiences since lockdown ended and outline some ways dealers can sustain their business recovery.

Rose said: “This is a crucial moment for UK motor retail. The new car registrations data from the first month since lockdown will tell us how strongly the industry is fighting back, and there’ll be feedback on how customers and staff are coping with new processes and PPE in showrooms.

“The lessons of the last few weeks must help motor retail prepare for Q3 and the looming plate-change campaign.”

Guest speakers signed up so far:

Tim Duckers, Cambria Automobiles

Duckers is the motor division managing director of AM100 motor retailer Cambria Automobiles, working alongside chief executive Mark Lavery to lead a portfolio of franchised dealerships from volume mainstream such as Vauxhall and premium brands such as Jaguar Land Rover to high luxury brands such as Bentley and Rolls Royce.

Steve Le Bas, BDO

Le Bas is the head of motor retail at accountants and business advisers BDO. He has some 20 years’ experience working with motor trade clients, including statutory audits, assisting their internal accounting functions and conducting due diligence assignments for prospective motor trade purchasers.

Dale Wyatt, Suzuki GB

As head of automobile at Suzuki GB, Wyatt is responsible for the brand health of Suzuki cars and splits his time between working with the UK management team, Suzuki’s dealer network and the parent company in Japan.

Ian Plummer, Auto Trader

Plummer, commercial director at Auto Trader, joined the car sales platform in 2017 after heading sales operations and franchise management at Volkswagen UK and before 15 years at Renault in roles at both the UK sales company and the head office in Paris.


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