Shares tumble in car dealership after investigation announced
Shares in car sales firm Lookers have fallen by almost a quarter after the company announced it is to be investigated by the Financial Conduct Authority.
The company, which has its headquarters in Altrincham, is being investigated over its sales practices.
Lookers has grown into one of the biggest car dealer groups in the UK and has been bolstered by a number of acquisitions.
The firm has weathered the downturn in the car market and sells more than 30 brands including BMW, Ford and Volkswagen.
Lookers announced the investigation earlier this week adding that last year the board became aware of certain matters requiring review.
The company appointed external advisers to examine areas including its “internal control, risk assurance systems and internal audit”.
The investigation revealed concerns with “some control issues in the sales processes” regulated by the FCA.
The findings were shared with the regulator which has led to the investigation of Lookers’ sales process.
The investigation will cover the period from January 2016 to this year.
The business has a turnover of £4.9bn with 90% coming from the sale of new and used cars.
The majority of cars are sold on finance deals such as a personal contract plan or loan.
Lookers said it “could not estimate what effect, if any, the outcome of this investigation may have”, adding that the company was co-operating fully with regulator.
A statement issued on behalf of the group said: “The FCA investigation is newly commenced and no findings have been made.
“The FCA will reach its conclusions in due course and, at this stage, the company cannot estimate what effect, if any, the outcome of this investigation may have.
“The company is co-operating fully with the FCA in relation to this and will update the market further when appropriate.
“We have invested in both our internal capabilities and external advice. The project will be completed and agreed actions will be implemented as soon as possible.”
Shares in Lookers fell by 16.9p on to 53.5p, a seven-year low, valuing the business at just over £200m.