Lookers issues positive trading update but delays results to November
16 October 2020
Troubled retail group Lookers has posted a positive trading update but has further delayed its full-year 2019 and H1 2020 results until November.
However, banks backing Lookers have also appointed financial advisors to the firm to help with talks about the group’s £250 million revolving credit facility, according to Sky News.
Lookers’ trading update revealed the group saw a 13.6% lift in new and used car sales in Q3 2020 compared with the same period in 2019.
In a stock market statement the group said: “Trading in Q3 resulted in underlying PBT significantly ahead of last year, largely offsetting the loss recorded in H1.”
The group added: “Like-for-like retail operating costs in the period were approximately 16% below last year. Excluding the impact of the Government’s Job Retention Scheme and business rates holiday scheme, retail operating costs were approximately 9% below last year as a result of the continued focus on all discretionary cost items.
“As at 30 September 2020 net debt was approximately £22.5m (2018: c£132.6m), substantially lower than last year.”
In its trading statement on 20 August, Lookers said: “As at 30 June 2020 net debt was approximately £13.5m (2019: £74.3m) after benefitting from the temporary Government deferral of tax payments.
“The Group’s revolving credit facility of £250m with five banks expires in March 2022. The Group will be exploring refinancing options during Q4 2020.
“The Group continues to enjoy the benefits of a property portfolio in excess of £300m.”
Lookers’ shares were suspended at the start of August when it failed to publish its 2019 results. It has since also failed to publish its first-half 2020 figures on time. Although Lookers’ CEO Mark Raban had previously stated: “The group expects to report H1 revenue of approximately £1.6bn (2019: £2.6bn).”
The delays to the accounts stem a failure by the firm’s auditor Deloitte to sign-off the figures due to uncovering a potential fraud. The investigation found a “cumulative total of approximately £19 million of non-cash adjustments” due to overstatements in profitability spanning several years, including the initial £4m reported at the start of this year.
Lookers revealed the figure from a draft report by Grant Thornton two days ahead of the shares being suspended following a delay to the firm’s accounts after a falling out with auditor Deloitte over the investigation.
Lookers is also still under investigation by the Financial Conduct Authority over car finance sales.
The group’s shares will remain suspended from the Stock Exchange until the accounts are published. Speaking to Auto Retail Agenda in June, the group had previously denied it would need extra time to publish the accounts.