Car dealer Lookers sees share price plunge 20% and delays results after finding suspected fraud in its books
- The number of annual new car registrations last year was its lowest for 6 years
- New chief executive Mark Raban was the former CFO of Marshall Motor Holdings
- Lookers originally sold bicycles and bicycle parts before becoming a Ford dealer
Car dealer Lookers saw its value on the stock market crash crash by 23 per cent this morning after it decided to postpone publishing annual results next month due to suspected fraud.
The Greater Manchester-based motor seller says it discovered ‘potentially fraudulent transactions’ while preparing its financial results and has appointed an outside investigator to look into the issue.
‘While the initial findings are not material in the context of the group, the board is appointing an external adviser to lead a full investigation into the matter,’ it states.
The FCA began a probe into Lookers last year over the way they sold car loans to consumers during a three-and-a-half-year period between January 2016 and June 2019
Lookers recorded a weaker performance in its year-end trading update last month, with group like-for-like sales dropping by 6.6 per cent in the fourth quarter although used car sales rose by 3.8 compared to 2.6 per cent the previous quarter.
It predicted in its interim half-year trading update in 2019 that the challenging conditions for the sector were likely to continue into the second half of the year with political and economic uncertainty playing a significant factor.
The interim results were published just a few weeks before it admitted the Financial Conduct Authority was probing them over the way they sold car loans to consumers during a three-and-a-half-year period between January 2016 and June 2019.
Chief executive Andy Bruce and chief operating officer Nigel McMill subsequently resigned from the company soon after it registered its second profit warning in four months.
Marshall Motor Holdings’ former CFO Mark Raban subsequently replaced Bruce as chief executive while Cameron Wade was appointed COO.
Last week, Raban wrote: ‘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.
Britons bought their fewest number of cars in six years in 2019. The number of annual new car registrations was 2.3 million last year, a 2.3 per cent fall from the year earlier
‘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.’
Britons bought their fewest number of cars in six years in 2019 according to the Society of Motor Manufacturers and Traders (SMMT).
The number of annual new car registrations was 2.3 million last year, a 2.3 per cent fall from the year earlier.
It was the third year in a row that motor sales declined and has been blamed variously on sliding consumer confidence and lower demand for diesel cars.
Lookers began life in 1908 selling bicycles and bicycle parts before moving on to selling Ford cars a couple of years later.
At the end of World War One, it became an Austin motor distributor and expanded throughout Lancashire and Cheshire.
The company gradually grew over the coming five decades and in 1973, became listed on the London Stock Exchange.
Today, it sells 31 car and van brands, including luxury carmakers Aston Martin, Ferrari and Jaguar, and has more than 160 dealerships throughout the UK and Ireland.