Lookers Group will target “improved operational execution” in 2020 following the appointment of Mark Raban as its new chief executive and Cameron Wade as chief operating officer.
The AM100 2019’s second-placed retail group by turnover revealed its chief financial officer – who joined from the CFO of Marshall Motor Holdings last August – had been promoted to the CEO role today (February 5) as it issued a year-end trading update via the London Stock Exchange.
Wade, who was previously, commercial director and managing director at Peter Vardy, assumes the chief operating officer post four years after he joined Lookers as franchise director of the group’s Audi Division.
Lookers started its search for a new chief executive and chief operating officer after Andy Bruce and Nigel McMinn stepped down from the business after announcing the start of an investigation into the business by the Financial Conduct Authority (FCA) back in November.
It will now begin the search for a new chief financial officer to replace Raban, but Phil White and Richard Walker will remain in their interim executive roles until March 31, when they will revert to their previous positions of chairman and senior Independent director, respectively.
White said: “I am delighted to be announcing Mark’s and Cameron’s new leadership roles. They both have significant sector experience which is well suited to both the Group’s immediate priorities and longer term strategic objectives.”
Raban said: “Lookers is a great business which is well positioned to take advantage of the many emerging opportunities across the sector. It’s a privilege to have the opportunity to lead the Group, working closely with our brand partners and supported by a talented team.
“I would like to thank Phil and Richard for their considerable support during the recent transition period.”
In its trading update for the year ended December 31, 2019, Lookers reported that its like-for-like new vehicle sales had performed marginally ahead of the overall market.
However, it blamed volume manufacturers’ tactical reduction in lower margin fleet volume and the further training and assessment in the sale of regulated products during November and December of all its dealership sales teams for a reduction in Q4.
Like-for-like unit sales of new vehicles in the period declined by 6.6% (Q3: down 3.2%) compared to a UK market decline in new vehicle registrations of 1.6% (Q3: down 0.6%).
Lookers reported that the used car market remained stable in Q4, with like-for-like unit sales of used cars up 3.8% (Q3: up 2.6%) as the group remained focused on continuing to reduce and improve the profile of its used vehicle inventory. The margin stabilisation reported in Q3 continued into Q4.
Lookers’ like-for-like gross profit from aftersales in Q4 was broadly flat (Q4: up 2.9%).
The group said that the 15 sites earmarked for closure as part of its ongoing portfolio review back in November (nine of which were owned on a freehold basis) had already resulted in the sale of four sites for £8.3 million.
This year will see the group attempt to strengthen its balance sheet through a focus on driving cash flow through improved working capital management, tighter control of discretionary costs, additional capital expenditure discipline and the disposal of surplus property, it said.
Its year-end net debt was described as “better than expected” at over £62m (December 31, 2018: £86.9m), representing less than one times underlying EBITDA.
In its outlook for the year, Lookers statement today stated that improved operational execution and robust management of discretionary costs was a top priority.
Raban said: "2019 was a challenging year for Lookers. The declining new car market, political and economic uncertainty and increased operating costs were all factors in the Group's decline in profitability.
“Over recent weeks the Board has instigated a number of clear and decisive actions to stabilise and improve operational and financial performance.
“The Board remains confident about the long-term prospects for the Group, benefitting from excellent OEM relationships, strategic trading locations and a strong freehold property portfolio."
Lookers will publish its full 2019 annual financial results on March 11.
The group's 2018 annual financial results delivered a 4% increase in turnover to £4.88bn during the period to December 31, 2018, but a profit before tax decline to £53.1m from £58.4m the previous year.