Lookers PLC COVID-19 Update (2798H)
March 23 2020 - 1:15PM
UK Regulatory
TIDMLOOK
RNS Number : 2798H
Lookers PLC
23 March 2020
23 March 2020
Lookers plc
("Lookers" or "the Group")
COVID-19 UPDATE
Site Closures and Ongoing Operations
The Board is incredibly grateful to our brilliant employees who
have been working hard to continue to serve our customers and the
community safely in difficult circumstances.
However, the Board has carefully considered the impact of
COVID-19 and the current advice of the UK Government. The Board's
priority is to support the welfare of our colleagues and customers
and to play our part in the national effort to reduce the further
spread of the virus.
Over the past 48 hours it has become clear that maintaining safe
social distancing measures whilst continuing to operate car
dealerships has become increasingly difficult. Against this
background and with the support of our OEM brand partners, the
Group is temporarily closing all of its trading locations with
immediate effect. This decision has not been taken lightly,
however, the Board is clear that the priority during these
unprecedented times is the safety and welfare of our people and our
customers.
Where possible and subject to enhanced operating procedures, the
Group will investigate the options for it to maintain some
servicing and repair capacity across the country where possible, as
the Board believes it will be important to support essential
services within local communities in these times.
The Group will continue to operate its online platforms and will
use this opportunity to review and enhance its capability.
UK Government Support
We welcome the measures announced by the UK Government to
support businesses through this unprecedented disruption, including
the Job Retention Scheme, the deferral of direct and indirect tax
payments and a business rates holiday for retail premises. During
2019 the Group paid c. GBP16m in business rates across its
portfolio. The Board intends to seek all possible government
support in order to help protect our colleagues and the future of
the business.
Stakeholders, Financing and Dividend
The Board is working closely with all its stakeholders including
its OEM brand partners, banks, stock funding providers, landlords,
pension trustees, shareholders and advisers. The Board would like
to thank all stakeholders for their ongoing support during this
period.
We have been in active discussion with our OEM partners, who
have supported the actions we are taking and are providing various
measures of financial and other support to help us navigate through
the current issues.
In recognition of this stakeholder support and to reduce costs,
all the members of the Board and various members of senior
management have agreed to temporary amendments to their contractual
remuneration.
In the current circumstances, the Board is taking a prudent
approach and pre-emptive action, where possible, to further
preserve cash and reduce overhead costs through a range of measures
including delaying capital expenditure projects. As a result, the
Board will not be recommending a dividend for the 12 months ended
31 December 2019.
As reported in the Group's year end trading update the Board
expects to report net debt at 31 December 2019 of approximately
GBP62.0m (2018: GBP86.9m). The Group has a GBP250m revolving credit
facility with five banks with a term to March 2022. In addition,
the Group continues to enjoy the benefit of a strong property
portfolio with a net book value of c. GBP317m (as at 31 December
2019) (81p per share).
On 10 March 2020, due to the discovery of some potentially
fraudulent transactions in one of its operating divisions, the
Group announced a delay to publishing its financial results for the
year ended 31 December 2019. The Group has recently appointed
external advisers to conduct an independent review. The
investigation remains ongoing.
Outlook
Given these unprecedented and rapidly evolving events it is too
early to make any reasonable estimate of the financial impact on
the Group during 2020 and beyond. The Group's focus over the coming
months will be to safeguard colleagues and customers and to ensure
financial stability through cash and working capital controls.
Mark Raban, Chief Executive Officer, said: "On behalf of
everyone at Lookers, our first thoughts are for those impacted by
the virus and their families. The Group's key priority is to
protect its employees and customers and do everything possible to
prevent the further spread of the virus. I want to particularly
thank our colleagues and our OEM partners for their decisive
support during this challenging time."
ENDS
Enquiries
Lookers Tel: 0161 291 0043
Mark Raban, Chief Executive Officer
MHP Communications Tel: 07709 496 125/ 07551 170
451
Tim Rowntree Email: Lookers@mhpc.com
Simon Hockridge
Alistair de Kare-Silver
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END
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