Lookers hit by £50m first-half loss after car showroom closures

Embattled car dealership Lookers booked a £50m loss in the first half of 2020 after the pandemic forced a widespread shutdown of its showrooms, according to delayed results published on Friday.

The company expects to make a small loss for the whole year after improved trading in the second half following the launch of a turnround and a clear out of the board in a governance overhaul.

Results were delayed after a multiyear fraud probe at the group, which uncovered tens of millions of pounds of inflated profits.

The publication of the half-year results prompted the lifting of a six-month shares suspension imposed because of delays to producing 2019’s accounts.

The shares rose to 43p from 22p within minutes of opening after being stopped at £21 in July. They settled at 39p by mid-morning on Friday.

The group, which is facing a historic mis-selling investigation by the FCA, suffered a sales fall of 40 per cent to £1.6bn in the first half, with a £50m pre-tax loss, compared with a £19.6m profit a year earlier.

As well as an underlying loss of £36m, the group also booked £4.2m in restructuring costs and £3.5m in fees for advisers related to its investigation and restatements.

We are confident that the group is now much better positioned for the longer term

The group previously set aside £10.4m to cover any expected fine from the mis-selling probe.

Chief executive Mark Raban, who was appointed last February, told the FT that he believes the “legacy stuff is now largely behind us” and the company can focus on the future.

A restructuring in the first half of last year led to 1,500 job losses and the sale of 12 sites, but helped boost the company’s profits in the second half of 2020.

In part because of Covid, the business is not expected to publish annual accounts for 2020 until possibly May, Mr Raban added.

“Going into 2021 there remains a high level of uncertainty in the wider environment, but we are confident that the group is now much better positioned for the longer term,” he said.

Earlier in January, the company faced a shareholder revolt over the pay of Mr Raban and other directors.

Some 29 per cent of investors voted against their remuneration, which includes Mr Raban’s pay package.

The group said it would “continue to review the appropriateness of the remuneration policy” and “notes the concerns raised by shareholders”.