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Auto retailer Lookers warns of first-half loss, expands probe on 2019 accounts

(Reuters) - Auto retailer Lookers LOOK.L warned on Thursday that weak demand and margin pressures will push it to a "material" pre-tax loss for the first-half of 2020 and extended a probe into 2019 accounts to the group and individual level.

The company, which had identified potentially fraudulent transactions in one of its segments, said it cannot publish its 2019 financial statement by August end as previously expected. It had delayed its annual results in March and June as well.

Lookers said the new scope of the audit means “further work” on its corporate leasing division, vehicle financing arrangements and balance sheets of 2018 and before to ensure correct identification and allocation of adjustments.

The Taggarts and Charles Hurst dealerships operator had said in June it would incur about 19 million pounds ($24.86 million) in non-cash adjustments to correct overstatements in profitability over several years.

On Thursday, it said the likely magnitude of the potential restatements will not prevent it from remaining profitable in 2019 at the underlying profit before tax level.

British car dealerships have suffered from weak demand and higher costs since the country’s planned departure from the European Union, and the coronavirus crisis has led many of them, including Lookers, to shut stores and cut jobs.

Reporting by Yadarisa Shabong in Bengaluru; Editing by Arun Koyyur

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