Lookers delays annual results due to fraud investigation

The embattled car dealership Lookers has postponed publishing its full-year results after discovering a potential fraud inside the business.

The firm said it would appoint an external adviser to investigate suspicious transactions at one of its divisions, adding to its list of problems including an investigation by the Financial Conduct Authority for “control issues in [its] sales process” between 2016 and 2019.

The announcement of the FCA investigation last June was followed four months later by the business parting company with its chief executive, Andy Bruce, and chief operating officer, Nigel McMinn, as it blamed Brexit uncertainty for its second profit warning in less than four months.

An earlier profit warning in July had also been blamed by Bruce on Brexit. Last month Mark Raban was appointed chief executive, having only joined the company in July as finance director.

On Tuesday, the group, which runs 164 car dealerships, 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.

“While 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.”

It expects the results to be published by the second half of April.

The company declined to reveal which of its divisions the potential fraud related to, although a Lookers spokesman said the issue related to one of 31 of its discrete businesses that deal with specific car brands.

Lookers sells vehicles for large manufacturers including Toyota, Ford and Volkswagen, as well luxury marques such as Aston Martin, Bentley and Ferrari.

Despite its challenging year, Lookers had attempted to provide some comfort to investors last month by stating that its end-of-year results would be in line with expectations.

Shares in the company have been trading at 11-year lows. The announcement of the potential fraud was made after the stock market had closed on Tuesday.

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