• LOOKERS RESPONDS TO SHAREHOLDERS
• MORE AREAS ON BRINK OF TIER 4
• VINES REPEATS £1.7M LOSS
• GILLANDERS CLOSES DUE TO COVID
• VW OF AMERICA ‘WANTS TO BE LOVED’
• STOCKWATCH – Pendragon up 10.9% in an otherwise quiet week
• COMING UP – Decision due on new Tier restrictions
• BOXING DAY SPENDING DOWN BY £1BN
• FCA ‘TO BE PRAGMATIC’ POST-BREXIT

Lookers responds to shareholders

Lookers emailed its top 10 shareholders ahead of a general meeting on Monday to say a recommendation to vote against the adoption of its 2019 annual report and accounts “would be disappointing” given the work involved to obtain an unqualified set of accounts.

The retailer also defended a salary rise to £450k for previous CEO Andy Bruce and said it was appropriate to pay new CEO Mark Raban “the full rate for the job”, which Auto Retail Agenda understands is the same sum. A recommendation to vote against his salary would be “harsh in the context of the decisions made in 2020”.

Lookers told shareholders no manufacturer bonuses had been incorrectly claimed. “One operating division created fictitious journal entries to recognise non-existent manufacturer bonuses [which] enabled the division to achieve its targets for the year.” These were “entirely internal… and were never communicated to, reported to, nor claimed from the relevant manufacturer.

“These transactions arose because of local management override and lack of central oversight and review, enabling unsubstantiated journals to be processed without challenge.”

The company also promised to use less overly technical language in future reports.

 

 

More areas on brink of Tier 4

A continuing rise in coronavirus cases means “millions more people” could enter Tier 4 restrictions this week. On Sunday, more than 30k positive Covid cases were confirmed, up 30% in a week. 99 of the 128 areas in Tier 3 recorded rising numbers, with the Isle of Wight, Gateshead and the Derbyshire Dales recording the largest rises.

A formal review of tiering decisions is due by Wednesday.

The government has also reminded motorists that MOT centres remain open even in Tier 4 areas – and it remains an offence to drive a vehicle that does not have a valid MOT.

http://bit.ly/2L0WVRk

 

Vines repeats £1.7m loss

Guildford’s Vines has reported a £1.73m loss before tax in the year ended 31 December 2019, after losing £1.77m in 2018. The BMW and Mini retailer blamed continued anti-diesel rhetoric and “significant volumes of pre-registered cars” which hit margins on young used cars. “This resulted in a significant reduction in gross margins across our business and the wider BMW network.”

It says actions to address the position include revised operating policies for used cars, finance sales and aftersales – although “the high proliferation of manufacturer service packs” means this business will become increasingly competitive going forward.

 

Gillanders closes due to Covid

Gillanders Motors has been forced to close after a worker tested positive for coronavirus. All departments at the Scottish Kia, MG and Suzuki retailer will be shut until at least 29 December. Gillanders will now work with the NHS trace and protect team.

http://bit.ly/2M2vfvZ

 

 

 

WORLD NEWS

VW of America ‘wants to be loved’

Volkswagen of America CEO Scott Keogh said that during the diesel emissions scandal, nearly 30% of US car buyers actively avoided the brand. That’s now down to 13%. He said the aim is to get the brand back to “being loved by Americans, not disliked by Americans”. Any brand has 8% or 9% avoidance, he added. “For whatever it is, they don’t like you.”

http://bit.ly/34Mmexy

 

 

STOCKWATCH

Closing prices on 24 December 2020 and weekly change

Pendragon up 10.9% in an otherwise quiet week

Auto Trader Group 583.6p (-5.4p / -0.9%)

Cambria 58.5p (n/c)

Caffyns 385.0p (n/c)

Halfords 270.0p (+8.0p / +3.0%)

Inchcape 643.5p (-5.0p / -0.7%)

Lookers Shares suspended at 21.0p

Marshall Motor Holdings 141.0p (-0.5p / -0.3%)

Motorpoint 300.0p (+20.0p / +6.8%)

Pendragon 12.38p (+1.28p / +10.9%)

Vertu 32.8p (+1.1p / +3.4%)

 

 

COMING UP

Wednesday, Nationwide House Price Index

Wednesday, decision due on revised Tier restrictions

Thursday, FCA to make around 300 updates to its website in preparation for the end of the Brexit transition period

 

MONEY MATTERS

Boxing Day spending down by £1bn

Barclaycard has estimated £2.7bn was spent by UK shoppers on Boxing Day (with people spending an average of £162 online). This is down from £3.7bn (£186 online) last year.

Retail footfall dropped by more than 75% in Tier 4 areas – and even in Tiers 2 and 3, where non-essential retail remains open, footfall declined 33.1% and 38.5% respectively. “After spending so much time online, consumers are now experts at virtual shopping,” said retail experts Springboard.

http://bit.ly/3rvpXtb

 

FCA ‘to be pragmatic’ with post-Brexit challenges

The FCA says it recognises the challenges for companies in systems and operations changes required when the Brexit transition period ends and “intends to take a pragmatic approach to any issues, should they arise, where firms can demonstrate they have taken all reasonable steps to prepare”. EU law will no longer apply in the UK from 11pm on 31 December 2020. The FCA has a dedicated Brexit section and a telephone line on 0800 048 4255.