Lookers Share Discussion Threads

[onjohn] 27/4/2020 08:25

ready to shoot up 30pc

[wobbly123] 25/4/2020 13:42

My mind is at ease as they head towards sub 10p.

Not going to get into a debate, one of us will be right and one wrong. Think the difference is you are long and hoping for a rise, I am short and could close now for a large profit but happy to let positions run.

[jabers1] 25/4/2020 12:17

Read the companies earlier statement and the information you need to put your mind at ease is within.

See you at 10p?? 🤷‍a94;️🤷‍♂ᥧ9;🤷‍♂️ 40-50p fairly quickly and then 100p through time.

[wobbly123] 25/4/2020 10:31

From your comment "this is not related" you are clearly hold a very senior position within Lookers or are part of the accountancy firm investigating the fraud.
Or you are making a guess.
If it was the former then you wouldn't be able to comment on the matter, which leads me to think the latter.

[jabers1] 25/4/2020 06:57

This is not related to any wrong doing relating to after-sales warranty claims though..

There is no self authorisation with vehicle bonuses and there is no fraudulent sales bonus activity between the manufacturer and the dealerships, i hear it is relating to bonuses being accrued for the next quarter whilst still trading in their current quarter.

For example, payments relating to consistency bonus payments which can relate to 6 month and 12 month periods, it is not uncommon in the Motor Trade for dealerships who have actually made their 6 months consistency payments say after 3, 4, or 5 months for them to early book some of their future bonuses into their accounts, HOWEVER this is only done with directors approval.

[woodwards26] 24/4/2020 23:08

Many manufacturers if a fraudulent claim is discovered on an audit of say 100 warranty claims and they find say a 5 % error so to speak would then charge you back 5% on a whole years claims . So a small "error "can be a big cost but they do give you a chance to appeal

[mortimer7] 24/4/2020 16:20

I'm with Jabers1 on this:
The "fraud" relates to misrepresented debtor balances in respect of bonus receivables from manufacturers.
Obviously these relate to the period prior 31/12/19, so any valid bonuses would've been settled by 31/1/20 & I'd expect any queried/disputed ones resolved by 31/3/20.
The investigation has a major advantage with the extension of time being allowed to produce the annual results. As such I'd expect the Auditors & Directors will by now have been able to identify the financial extent of the problem.

[nick rubens] 24/4/2020 13:37

Alot of directing buying in the 48-50p or so range last August. Are we in a closed period? Annual results due 30th April?

If so, I expect after the results there should be more director buying, if the stock is good value like I think it is. That would encourage me to add.

[wobbly123] 24/4/2020 12:44

You say not a 1% chance of it costing £Millions. They have stated £4m provision for fraud and expanding the investigation into other divisions. Seems very clear to me even if you consider your intelligence level to be higher than mine.
You should perhaps also consider that the fraud cost could be accounted for after the PBT, but then I'm not very intelligent.

Sub 10p here we come

[jabers1] 24/4/2020 11:37

Your comment regarding £4m x how many divisions, really does question your intelligence and understanding of the situation.

No director in the world would be allowed by their NOMAD to release the following statement if it was felt there was even a 1% chance of this fraud turning into millions and millions of pounds.

“While the aggregate impact of the fraud investigation is not yet known, the Board currently anticipates that the Group WILL STILL be PROFITABLE for FY 2019 on an underlying PBT basis”

[mortimer7] 24/4/2020 10:24

Good overview woodwards26. Obviously know your stuff in terms of motor trade accounting.
Manufacturer bonus related accounting always open to manipulation by Sales Managers, Dealer Finance Staff, GM's etc.
External Auditors always struggle to understand the intricacies of manufacturer schemes. As you elude to, always will be discovered eventually when not paid.

[wobbly123] 24/4/2020 09:43

£4m x how many divisions ?
sub 10p here we go

[woodwards26] 24/4/2020 09:35

Bonus will probably be overstating bonuses paid by manufacturers for volume achievement etc so they go into debtors till reconciled when paid.Someone has probably overstated these to increase their pay of just keep their job. Or through not understanding a manufacturers campaign just got it wrong . It would always be discovered when not paid but someone should have run a rule over them before taking to profit.Some accountants would only take to profit when paid but that would leave huge calendar year end and plate change months looking light.Personally if a sales manager worked out the months bonuses due I would go over the workings before taking to profit and hence creating a debtor

[wobbly123] 24/4/2020 09:14

£4M hit for fraud -How can a major company not spot £4m bonus and expenses fraud ?
Fraud investigation extended to other areas of the business.
No mention of the costs of the investigations.
Ignored FCA investigation
Will sell more sites in 2020-who to? they are dreaming.
Financing expires 2022
FCA allowing 3 month break in finance payments= delay in replacing vehicles.
Lockdown will last for how long ?
AND THE BIG ONE ACCOUNTS DELAYED AGAIN

Share price up this morning-UTTER MADNESS
Have increased short posistion.

[jaf111] 24/4/2020 09:10

"Car sales operations be resuming soon."

Maybe but would LOOK be your first choice of car dealer?.....for me certainly not at the moment due to its specific issues.....I would favour CAMB, MMH or VTU

[nick rubens] 24/4/2020 08:47

Car sales operations be resuming soon. Business will be getting back to 'normal' ( social distancing included) once again. Lots to look forward to IMO.

[debsdowner] 24/4/2020 08:32

Profit on an "underlying business" is still ambiguous. Exceptional costs can take the company to losses !

[jaf111] 24/4/2020 08:00

....and no mention of FCA investigation?

[jaf111] 24/4/2020 07:58

....and further fraud investigation.......

[jaf111] 24/4/2020 07:57

Not a lot of cheer here.....

[jabers1] 24/4/2020 07:57

The Board currently anticipates that the Group WILL STILL be PROFITABLE for FY 2019 on an underlying PBT basis.



Net debt at 31 December 2019 is not anticipated to be impacted by any of the investigations finding to date

[jabers1] 24/4/2020 07:54

Lookers plc

("Lookers" or "the Group")

TRADING AND OPERATIONAL UPDATE

Lookers plc, ("Lookers" or "the Group"), one of the leading UK motor retail and aftersales service groups, provides the following trading and operational update.

Trading Update

In the two-month period ended 29 February 2020 ("the Period"), prior to the impact of Covid-19, the Group recorded a like-for-like decline in new vehicle unit sales versus last year of -4.8% compared to a UK new car market which declined by -5.8%. In the Period like-for-like unit sales of used vehicles declined by -2.6% whilst like-for-like aftersales revenue was up by 0.9%.

In addition to the vehicle sales volume decline the Group also suffered margin pressure primarily driven by a management decision to reduce its holding of aged used and demonstrator inventory.

This was partly offset by a reduction in operating costs, following a series of management actions implemented in November 2019, including a headcount and recruitment freeze. Headcount is currently 6% below the level at the commencement of the initiative. As a result of this and other actions, like-for-like operating costs in the Period were marginally below last year's levels.

Operations

On 23 March 2020, in order to protect the safety and welfare of our people and customers and in response to UK Government social distancing advice, the Board took the decision to temporarily close all its trading locations. Following the introduction of new operating measures, the Group has subsequently partly reopened 31 locations which are providing essential repairs and maintenance to key workers' vehicles and 10 parts distribution centres. The Board would like to thank our colleagues who have volunteered to deliver these essential services.

Portfolio Review

The Group announced in November that it had identified 15 sites for closure as part of its ongoing portfolio review. This programme is largely complete and liberated 9 Freehold sites. We have now sold 7 sites, generating proceeds of GBP17.6m in 2019; the remainder, along with other surplus freehold properties, will be sold during 2020. With the support of its brand partners this review remains ongoing and the Board anticipates that further opportunities exist which will drive profitability and release capital during the second half of 2020.

Financial Position

The Board is continuing to take a prudent and decisive approach to managing cash and would like to thank all stakeholders for their ongoing support during this period.

We welcome the measures announced by the UK Government to support businesses through this unprecedented disruption. We have furloughed approximately 7,000 colleagues. All members of the Board and senior management have agreed to temporary reductions of up to 30% to their contractual remuneration.

As reported in the Group's year end trading update the Board expects to report net debt at 31 December 2019 of approx. GBP62.0m (2018: GBP86.9m). Net debt on a cleared funds basis as at the date of this announcement is approximately GBP65m.The Group's GBP250m revolving credit facility with five banks expires in March 2022.

Fraud Investigation

On 10 March 2020 the Group announced a delay to the publication of its financial results for the year ended 31 December 2019 due to the identification of potentially fraudulent transactions in one of its operating divisions. During March 2020, in conjunction with Grant Thornton LLP, the Board commenced an investigation, the initial phase of which is now complete.

The initial phase of the investigation focused on the operating division concerned and identified certain misrepresented debtor balances in respect of bonus receivables together with a number of fraudulent expenses claims. These items are expected to give rise to a one-off, non-cash charge, in the 2019 financial statements of circa GBP4m.

At the request of the Board the initial investigation was extended across all operating divisions. As a result of movement restrictions during the covid-19 crisis this remains ongoing. Initial indications have identified some operating divisions where certain non-cash balance sheet accounts have not been fully reconciled, in accordance with Group policy. These items are expected to give rise to a one-off, non-cash charge, however this part of the investigation is still ongoing.

While the aggregate impact of the fraud investigation is not yet known, the Board currently anticipates that the Group WILL STILL be PROFITABLE for FY 2019 on an underlying PBT basis.

Net debt at 31 December 2019 is not anticipated to be impacted by any of the investigations finding to date.

[dafad] 24/4/2020 07:39

Trading update out-possible further accoumting errors being investigted