Lookers says fraud investigation expanded again but trading has improved
Lookers PLC (LON;LOOK) said it is still not able to quantify the impact of the fraud identified earlier this year on its 2019 numbers.
The car dealer has already taken a £19mln charge, but an investigation by accountant Grant Thornton has now been expanded to include corporate leasing division and vehicle financing arrangements in 2018 and previous years.
Lookers repeated that it still expects to post a profit for 2019.
In a trading update for the two months to end July 2020, Lookers said it had seen a release of pent-up demand following the easing of the coronavirus lockdown and last month invoiced and delivered over 14,000 new retail and used vehicles, a rise of more than 17% on a year earlier.
Like-for-like service revenues improved and combined with lower costs and tighter working capital control, the company said underlying profit before tax was materially ahead of last year during July.
Results for the half-year to end-June, 2020, however, will show a material underlying loss even before charges associated with the Grant Thornton investigation. Interim revenues tumbled by £1bn to £1.6bn due to lockdown restrictions on its activity.
The company said it has received £29mln from the Government’s Job Retention Scheme, while net debt at the end of half-year was £13.5mln.
In June, Lookers announced plans to close 12 dealerships, a programme that is now largely complete it said with £30mln of property earmarked for disposal.
In the update, Mark Raban, Lookers’ chief executive said: “This has been a very challenging period for Lookers, but it is encouraging that we are beginning to see some healthy signs of recovery in vehicle sales since the easing of lockdowns.”
Shares in Lookers are suspended until the 2019 accounts are published.