Lookers PLC UPDATE ON GRANT THORNTON INVESTIGATION (2952R)
June 29 2020 - 01:00AM
UK Regulatory
TIDMLOOK
RNS Number : 2952R
Lookers PLC
29 June 2020
29 June 2020
Lookers plc ("the Company" or "the Group")
UPDATE ON GRANT THORNTON INVESTIGATION
The Company provides an update on the investigation being
conducted by Grant Thornton UK LLP, supported by its internal
team.
As previously announced a draft report (the "Draft Report") was
received by the Company in early June. The Company has now
completed its initial review of the Draft Report and is in
discussions with Grant Thornton UK LLP and Deloitte LLP, the
Group's auditors, with a view to concluding outstanding matters at
the earliest opportunity.
The Draft Report identified a cumulative total of approximately
GBP19m of non-cash adjustments (the "Draft Adjustments") necessary
to correct overstatements in profitability over several years. The
Company has reviewed and agreed the Draft Adjustments and currently
considers that approximately half of the Draft Adjustments impact
the 2019 results with the remainder accumulated in prior years.
Analysis is ongoing to determine the historical impact of the Draft
Adjustments prior to 2019, but at present it is not possible to
determine if the historical elements of the Draft Adjustments would
be material in any year.
As previously reported, circa GBP4m of the Draft Adjustments
relate to the initial phase of the investigation which focused on
one of the Group's operating divisions. These adjustments include
certain misrepresented and overstated debtor balances in respect of
supplier bonuses receivable together with a number of fraudulent
expense claims.
The remaining GBP15m of the Draft Adjustments relate to the
incorrect or inconsistent application of policies, processes and
accounting standards. The Draft Report also highlighted several
areas where certain financial controls and some behavioural and
cultural aspects require strengthening.
The Company has commenced implementing remedial measures to
address these points and is continuing to invest in its systems and
controls to further improve their robustness. An independent Board
committee has been established to ensure proper implementation of
the recommendations from the report.
Whilst the Company is making good progress in resolving the
investigation there remain a number of outstanding issues and until
such time as these issues are resolved and Deloitte LLP have
completed their audit, it is not possible for the Company to
confirm the full impact.
However, the Board believes that 2019 will remain profitable at
the underlying profit before tax level.
Further updates will be provided as appropriate.
This announcement includes inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014.
For further information:
Mark Raban, Chief Executive Officer Tel: 0161 291 0043
MHP Communications
Tim Rowntree, Simon Hockridge Tel: 07709 496 125 / 020
3128 8527
Email: Lookers@mhpc.com
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END
UPDFPMLTMTBTBJM
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