Auto Retail Agenda: 15 June 2020
14 June 2020
- LOOKERS SEEKING EXTRA INTERNAL AUDITORS
- PPI CLAIMS FIRMS NOW TARGETING AUTO RETAILERS
- USED CAR PRICES: UP OR DOWN?
- LIPSCOMB OPENS, ARNOLD CLARK CLOSURE?
- VROOM DOUBLES AFTER IPO
- HOLDEN AND DEALERS HEADING TO COURT?
- STOCKWATCH – Lookers, Caffyns suffers heavy falls, Pendragon up
- COMING UP – Scotland and Wales lockdown reviews, UK unemployment
- AUTO RETAILERS LEAD FURLOUGH TABLE
- CARTEL WARNING FROM NFDA
Lookers seeking extra internal auditors
Lookers is advertising for four experienced big 4 auditors who are immediately available to “complete a complex audit and accounting investigation”. The four recruits, who must be ACA qualified and have two years’ experience, will support local finance teams in preparing analysis for presentation to external advisors.
The roles are 3-6 months fixed term contracts with “a possibility of extension”.
Earlier in June, Lookers announced its shares are expected to be suspended as it will not meet a 30 June deadline for publishing its 2019 results. It said the results will be published “no later than the end of August 2020”.
A spokesman confirmed to Auto Retail Agenda there is “no change to this timeframe… these guys are coming on board to speed things up”. They will then be involved in other audit-related processes, including Lookers interim 2020 results.
One expert told Auto Retail Agenda the 2019 results delay could affect the publication of Lookers’ 2020 H1 results, produced last year in August.
Lookers is parting company with auditor Deloitte and is tendering to appoint a new auditor.
Lookers is, however, advertising for new IT and cyber security roles based at its head office in Altrincham.
PPI claims firms now targeting auto retailers
After securing £50bn in PPI compensation, claims management firms are now focusing on Britain’s £75bn motor finance sector, warns Lawgistics. Letters are being issued to retailers claiming clients were not told dealers earned commission on car finance. They allege this is a breach of the FCA’s consumer credit source book rules.
New guidance from the FCA clarifying dealers’ obligations in car finance is expected later this year.
Used car prices: up or down?
Analysts have responded to a report last week from Cazana suggesting a weekly average downward shift in used car prices of £162 per car. CAP HPI’s Derren Martin said it was “certainly not what we’re seeing in our data: values are mainly going up,” with an average increase of £150 per car during June.
Auto Trader’s Ian Plummer said retail prices are increasing on the platform, not decreasing. Indicata Europe’s Andrew Shields also said UK used car prices are either stable or increasing. Inchcape UK CEO James Brearly said “an acute shortage of used cars” is driving prices up.
Join the Auto Retail Live webinar on Thursday 25 June to hear about sourcing and pricing in the used car market. Neil Smith from Imperial Car Supermarket, Rupert Pontin from Cazana and Bex Clark from Auto Trader will answer your questions.
Lipscomb opens, Arnold Clark closure?
Lipscomb Volvo Canterbury has finally opened, three months late. The £5m year-long development involved constructing a new junction on the A28 and an upgraded electric mains connection. “We had to jump through countless hoops with the city council and Kent Highways” said MD Peter Barnes.
Consultation has begun over the future of Arnold Clark Skoda Inverness. The proposal is to not reopen and CEO Eddie Hawthorne said the firm is considering redeploying some of the 30 staff to its other Inverness franchises, including Hyundai, Mercedes-Benz and Renault/Dacia.
Vroom doubles after IPO
US online used car sales company Vroom more than doubled in price in its first day of trading following its IPO. Shares closed on $48, 117% above the opening price of $22. The original target range was $18-$22. This gave it a market capitalisation of $5.4bn. The company raised $470m in the IPO from the sale of 13% of shares.
Holden and dealers heading to court?
Holden retailers may take legal action after failing to agree on improved closure compensation in mediation talks. GM is offering $1,500 per vehicle and a contribution to capital costs. The dealers want $6k plus the true cost of investments. Observers say the legal battle could take years and cost retailers millions.
Closing prices on 12 June 2020 and weekly change
Lookers, Caffyns suffers heavy falls, Pendragon up
Auto Trader Group 530.0p (-21.0p / -3.8%)
Cambria 52.0p (+1.45p / +2.8%)
Caffyns 242.0p (-58.0p / -19.3%)
Halfords 176.8p (-8.8p / -4.7%)
Inchcape 502.0p (-28.0p / -5.2%)
Lookers 21.0p (-8.28p / -28.2%)
Marshall Motor Holdings 120.0p (-5.0p / -4.0%)
Motorpoint 259.0p (-13.0p / -4.7%)
Pendragon 9.94p (+1.24p / +14.2%)
Vertu 26.25p (-3.15p / -10.7%)
Tuesday, UK unemployment figures
Wednesday, CPI and RPI
Thursday, Scotland lockdown review
Thursday, Bank of England interest rate decision
Friday, Wales lockdown review
Auto retailers lead furlough table
Auto retailers top the table of Coronavirus Job Retention Scheme claims, new figures show. £3.3bn has been claimed by the sector, for more than 1.6m employees on furlough, by almost 162k businesses. Nigel Morris from MHA MacIntyre Hudson warned this could put the sector “in the firing line when it comes to future HMRC compliance reviews and clawbacks” and advised retailers to review procedures, processes and claims.
Cartel warning from NFDA
The NFDA says the success of an Austrian PSA dealer in the nation’s Cartel Court could have implications for UK retailers. The court found PSA Austria to have abused its market power through contractual and financial controls imposed on dealers, placing them at an “unacceptable economic disadvantage”. If upheld on appeal, the decision could be “hugely significant” for dealers. A full briefing has been produced by the NFDA by solicitors TLT LLP.