Lookers boss apologises as 2019 figures reveal £21.8m fraud hit
The boss of car dealership Lookers has apologised “unreservedly” as long-awaited 2019 results revealed a £45.5 million annual loss and a £21.8 million hit from a cash expenses fraud.
The group’s balance sheet blow comes after investigations by Grant Thornton uncovered a cash fraud dating back several years in one of its divisions.
The 2019 results, which had been delayed a number of times since March amid the ongoing probe, shows its annual loss compares with profits of £41.9 million the previous year.
Executive chairman Phil White said Lookers had endured an “extremely challenging” past year.
The group suspended shares in July after the fraud was unearthed and was then sent reeling by the coronavirus crisis.
Mr White said: “The investigation into our financial systems and accounting controls, the delay in the publication of our 2019 results and the subsequent temporary suspension of our shares have been a great disappointment.
“As chairman of Lookers, I would like to apologise unreservedly to all our stakeholders for the uncertainty this has caused.”
The 2019 results show the fraud pushed one of its divisions to a £327,000 loss, which it alleged was committed by one individual who is now the subject of a criminal investigation.
While investigating the fraud, Lookers also found accounting errors for the same division dating back years, leading to the balance sheet impact.
It insisted that it was taking action to ensure its systems and controls are tightened to prevent similar issues in future.
Investigations by the Financial Conduct Authority are ongoing.
Lookers reiterated that it expects to post a “material” underlying loss in the first half of its new financial year, although it said third-quarter trading was better than expected.
It sees the fourth quarter benefiting from the “full impact” of cost-cutting measures, but it will be impacted by the closure of dealerships due to the second English lockdown and ongoing restrictions.
The results come amid car industry fears over the threat of a no-deal Brexit and after the Government brought forward the ban on the sale of petrol and diesel cars to 2030.
Lookers warned: “The announcement of the second Covid-19 lockdown and potential impact of Brexit means that there is material uncertainty around trading in the remainder of 2020 and 2021.”
An overhaul launched last November has seen more than a fifth – 22% – of its workforce cut by the end of September, leaving it with around 6,700 staff.
This comes after the latest round of redundancies announced in June saw around 1,500 jobs axed.