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to be hit by a temporary suspension of shares trading after conceding that its 2019 annual financial results will not be published in time for the Financial Conduct Authority’s (FCA) June 30 deadline.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.