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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Lookers PLC    LOOK   GB00B17MMZ46

LOOKERS PLC

(LOOK)
  Report  
Real-time Quote. Real-time CHI-X - 07/24 05:24:04 am
44.875 GBp   -1.05%
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Lookers : shares hit seven-year low as watchdog probes sales practices

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06/25/2019 | 12:49pm EDT

(Reuters) - Shares in Lookers Plc slid to their lowest in over seven years on Tuesday after the car dealership said Britain's financial watchdog is investigating its sales processes over the last three years.

The Financial Conduct Authority (FCA) had been looking into lending practices in the fast-growing car financing sector since 2017 and said in March that some motor dealers were overcharging customers in interest charges in order to obtain bigger commission payouts for themselves.

The company said last year that it had found "some control issues" in its sales practices during an independent review of its internal control and audit processes launched in December, details of which it then shared with the FCA.

The FCA investigation will examine the company's sales processes between January 2016 and June 2019, Lookers said on Tuesday.

"The FCA will reach its conclusions in due course and, at this stage, the company cannot estimate what effect, if any, the outcome of this investigation may have," the company said.

Shares closed down 24% at 53.5 pence, their lowest since February 2012.

"Our understanding is that this is an administration issue rather than a more fundamental problem with the products or pricing," analysts at Peel Hunt said in a note.

"Clearly, there will be no surety of outcome until the FCA has completed its investigation, although administration issues (which we understand are likely to have been corrected) should be less material than more substantive failings," they added.

The investigation comes as the chain, which sells vehicles for 32 manufacturers including Volkswagen, Ford and BMW, is battling higher costs and weak new car sales.

Consumer spending in Britain is faltering amid uncertainty over its move to leave the European Union, which could end free trade with its biggest trading partner. The car industry also faces particular challenges, including declining diesel vehicle sales, stricter regulations and the costs of developing new technologies such as electric and self-driving vehicles.

Peer Pendragon, which operates the Evans Halshaw, Stratstone and Quickco brands, earlier this month warned of a pretax loss this year, blaming weak demand for new and used cars.

British new car registrations dropped 4.6% in May, an industry body said earlier this month.

(Reporting by Shariq Khan and Justin George Varghese in Bengaluru; Editing by Jan Harvey and David Evans)

By Justin George Varghese and Shariq Khan

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Financials (GBP)
Sales 2019 4 958 M
EBIT 2019 63,3 M
Net income 2019 32,6 M
Debt 2019 88,0 M
Yield 2019 8,49%
P/E ratio 2019 4,78x
P/E ratio 2020 4,29x
EV / Sales2019 0,05x
EV / Sales2020 0,05x
Capitalization 177 M
Chart LOOKERS PLC
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Technical analysis trends LOOKERS PLC
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TrendsBearishBearishBearish
Income Statement Evolution
Consensus
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Buy
Mean consensus HOLD
Number of Analysts 8
Average target price 58,33  GBp
Last Close Price 45,35  GBp
Spread / Highest target 109%
Spread / Average Target 28,6%
Spread / Lowest Target -11,8%
EPS Revisions
Managers
NameTitle
Andrew Campbell Bruce Chief Executive Officer & Executive Director
Philip Michael White Non-Executive Chairman
Nigel John McMinn Chief Operating Officer & Executive Director
Robin Anthony Gregson Chief Financial Officer & Executive Director
Douglas Charles Antony Bramall Non-Executive Director
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