Lookers shares boom as stock finally readmitted to trading
Shares in long-troubled car dealership Lookers rose 90 per cent today as the firm’s stock was finally readmitted to trading.
The FCA suspended shares in the auto firm back in July after failing to publish its full year results for 2019.
The discovery of a £19m hole in its figures threw the firm into disarray and led to the resignation of auditor Deloitte. It has now been replaced by BDO.
Having managed to publish its 2019 results in November, the FCA waited until Lookers managed to get out its first half 2020 results today before readmitting the stock.
It was hoped that shares would be readmitted if the firm could releases its interim results in December, but it failed to do so, leading to the resignation of finance chief Jim Perrie.
Despite figures showing that the firm made a £36m loss, the stock soared on readmission, with traders piling in.
Across the first half, revenue dropped from £2.6bn the prior year to £1.6bn, it said.
Lookers added that trading in the second half of 2020 was encouraging, “underpinned by significant outperformance of the retail UK new car market”.
It also said it was beginning to see the benefits of its restructuring programme, which entailed closing 12 sites and cutting 1,500 jobs.
Although England is back in lockdown, the firm said that the impact would be mitigated by the fact dealerships were still open for click-and-collect purchases.
Chief executive Mark Raban said: “2020 was a challenging year for Lookers, managing the impact of the COVID-19 pandemic and a number of legacy issues facing the Group, which required significant action to restructure and improve the business for the long term.
“Despite a resilient sales performance, the benefit of Government support and prompt action taken to manage costs, in the first half we incurred a significant loss in a very difficult period for the car retail industry.”
The car dealer will be hoping that the publication of today’s results can bring an end to a challenging chapter in its history.