Lookers boss shown the door after another profit warning
The car dealership will now be run by its chairman whilst a replacement is found.
The chief executive of car dealership business Lookers was shown the door after 19 years with the company on Friday as the company warned the challenging car market is continuing to hit the business.
The company, which had already issued a profit warning in July, said trading since mid-September had “been much more challenging than expected”.
Boss Andy Bruce, who has been with Lookers since 2000, taking the top seat in 2014, and chief operating officer Nigel McMill will leave on Friday and a search for their replacements is now under way.
After nearly two decades with Lookers, it is now time for me to move onto new ventures and allow new leadership to take the business into its next chapter. Andy Bruce, former Lookers CEO
Chairman Phil White said: “It is disappointing to report this downturn in trading, but we have taken action to drive the future financial performance of the group.
“The board is resolute in its determination to restore the Group’s fortunes with market leading practices in the sector.”
Mr Bruce said: “After nearly two decades with Lookers, it is now time for me to move onto new ventures and allow new leadership to take the business into its next chapter.”
Mr McMinn added: “I have enjoyed helping to build the business at Lookers and working with a great team of people.”
Management said it now expects underlying pre-tax profits to hit just £20 million this year, compared with £67.3 million in 2018.
Lookers blamed the poor performance at its 150 showrooms on “ongoing weakness in consumer confidence in the light of political and economic uncertainty, pressure on used car margins and retail cost inflation”.
It added that due to these ongoing challenges, the board has sped up the sell-off of non-core assets in the business, or “portfolio consolidation”, to improve the company – although site closures are expected to cost £8 million this year.
In the three months to the end of September, like-for-like sales of new cars fell 3.2% compared with a fall of 1.2% in the first half year.
The used car market was more stable, with like-for-like unit sales up 2.6% compared with a rise of 2% for the first half year.
But it was not enough to save Mr Bruce and Mr McMill, who both leave with immediate effect.
Chairman Phil White takes over as executive chairman and non-executive director Richard Walker will also take on a part-time executive role, the company said.
The car market has been struggling recently, with environmental concerns and Brexit playing a part, especially with families putting big ticket purchases on hold during the uncertainty.
Lookers is also under investigation by the FCA over the way it sold car loans between January 1 2016 and June 13 this year. The company said it continues to “fully support” the FCA, but added “we are unable to predict what, if any, impact the outcome of the investigation may have”.
Independent analyst Nick Bubb said of the announcement: “It would be easy for the car dealer Lookers to blame ‘Brexit uncertainty’ for today’s profit warning, but the fact that the veteran CEO has stepped down implies that the problems are company-specific.”
Shares in Lookers fell 22% in early trading.