Car group pulls results after uncovering ‘potentially fraudulent transactions’
Cheshire motor dealership Lookers said it has identified “potentially fraudulent transactions” in one of its operating divisions.
Consequently, it has postponed publication of its annual results for the year to December 31, 2019, which were due to have been released this morning (March 11).
In a stock exchange announcement yesterday evening the group said: “In the final stages of preparing its results for the financial year ended 31 December 2019, the company has identified potentially fraudulent transactions in one of its operating divisions.
“As a result the board has decided to postpone the announcement of its results until the second half of April.”
It added: “Whilst the initial findings are not material in the context of the group, the board is appointing an external adviser to lead a full investigation into the matter.”
Last month the Altrincham group released a market update, saying that, although challenging, trading during the three-month period ended 31 December 2019 was as expected and the group anticipated reporting underlying profit before tax for the year in-line with expectations.
Lookers, which operates 164 dealerships, has endured a turbulent year.
The group had bucked the industry trend by reporting continued increases in revenues and profits, but last March it revealed a nine per cent decline in profits before tax of £53.1m, despite a four per cent uplift in turnover, from £4.67bn to £4.88bn, for the year to December 31, 2018.
But it said it had made a good start to 2019 with its order book for the delivery of new cars in March continuing to build in line with its expectations, while used car volumes continued to show growth and further opportunities in aftersales.
Chief executive Andy Bruce said: “We have produced a resilient set of results against a backdrop of more challenging conditions in the motor sector, increasing sales and maintaining profitability.”
However, in late June last year, its shares fell by almost a quarter after the company had announced it was to be investigated by the Financial Conduct Authority over its sales practices.
Then, on July 6, it announced that its chief financial officer, Robin Gregson, was stepping down after 10 years in the role as part of its “succession planning”.
Lookers said Mark Raban was to be appointed as chief financial offer and join the board on July 15.
A week later, on July 12, the group issued a profit warning.
And in August its interim results revealed an almost 40% fall in pre-tax profits of £24.9m, despite a 2.7% improvement in sales of £2.646bn.
Then, on November 1, last year, the group revealed that chief executive Andy Bruce and chief operating officer Nigel McMinn had stepped down with immediate effect.
At the same time, the group said it expected to report underlying profit before tax for the full year of approximately £20m, down from £63.7m in 2018.
Early last month Mark Raban was unveiled as chief executive and Cameron Wade as chief operating officer.
Mr Raban said: “2019 was a challenging year for Lookers.”