What a week for Lookers
15 March 2020
Last weekend, we ran a small story about Lookers. The group’s recently-opened £10 million Audi Farnborough dealership scooped the brand’s Divisional Investor Award while, just down the road, sister business Guildford Audi also picked up an award.
It was a high point after what has been a difficult year for Lookers, which saw the retail group issue profit warnings, come under investigation by the Financial Conduct Authority and also remove Andy Bruce, its chief executive, and Nigel McMinn, the chief operating officer.
Mid-week, things got even worse for the group.
First, just after the stock market closed on Tuesday, Lookers put out a statement saying it was delaying the announcement of its annual results, which were due 14 hours later, because it had found “potentially fraudulent transactions” in one of its divisions.
This was followed by the resignation, on Thursday, of Cameron Wade, who had been in the role of chief operating officer for a month. And Mr Wade’s previous role was Lookers’ Audi franchise director.
The week’s announcements mean Lookers share price is now at a 10-year low.
Auto Retail Agenda understands that while, as stated in the delaying notice, the impact of any “potentially fraudulent transactions” will not be material to Lookers’ final results, the questions that are being asked surround the timing at which this was picked up. Was it really only spotted with hours to go before the annual results were supposed to be issued?
If the answer to that one is ‘yes’, then the follow-up is ‘are the checks and controls so poor that something like this can (a) happen in the first place, and (b) go unnoticed until the eleventh hour?’.
If the answer is ‘no’, then this opens Lookers up to some serious scrutiny about who knew and when? A question anyone with shares in the company would, particularly, want to know.
If all that isn’t bad enough, all of this comes when the stock market was already pushing share prices down, the new car market is falling and there’s the spectre of Covid-19 hanging over the industry.
Auto Retail Network