Lookers, Vertu shut all operations as car dealers comply with guidelines against coronavirus spread
Vertu initially planned to remain open for outstanding vehicle deliveries until Wednesday.
The firm also said it has drawn £10mln from an existing revolving credit facility to provide liquidity and would not recommend a final dividend for the year to 29 February.
Lookers has also dropped its payout, though the coronavirus only adds to its existing problems, including a fraud investigation.
Analysts at Liberum said Lookers is “fighting many fires”, noting the group announced earlier this month that it had discovered “potentially fraudulent transactions” in one of its operating divisions
“After a series of warnings, the business is in a much weaker position than it was a year ago, but the new chief executive has been quick to improve cash management,” Liberum’s analysts said, putting their 55p target price and ‘hold’ recommendation on Lookers under review.
“We expect Lookers to survive, but financial support from various stakeholders may come at a significant longer-term cost,” they added.
Brighter outlook for Vertu
Liberum’s analysts see a brighter future for Vertu, which they expect to “weather the storm better than many peers”.
“The start point is a strong, asset-backed balance sheet and operational excellence,” the analysts said in a separate note to clients, repeating a ‘buy’ rating and 50p target price on Vertu shares
Shares in Lookers were up 7% to 12.4p on Tuesday morning, while Vertu dipped 1% to 17.14p.
–Adds broker comment on Vertu —