(Reuters) – Automobile dealership Lookers Plc (LOOK.L) on Wednesday posted a steep drop in first-half revenue and stated it sees larger prices over the subsequent a number of years, because it carves out a plan to repair some points it present in its gross sales practices.
The corporate stated it might make a one-time money funding of about 10 million kilos ($12.06 million) over 2019 and 2020, with annual prices rising thereafter.
Lookers stated prices would rise by about three million kilos per yr from 2020 for a plan that may embody a assessment of its previous enterprise, set up a revised gross sales course of and put in place new high quality checks.
The corporate had stated final yr that it discovered “some management points” in its gross sales practices throughout an impartial assessment of its inside management and audit processes, particulars of which it then shared with the Monetary Conduct Authority (FCA).
The FCA’s investigation into Lookers, which sells automobiles for producers together with Volkswagen (VOWG_p.DE), Ford (F.N) and BMW (BMWG.DE), will look at the corporate’s gross sales processes between January, 2016 and June, 2019.
Lookers, which has additionally been hit as stricter emissions laws, Brexit uncertainty and extra customers shifting to electrical or hybrid automobiles dent automotive gross sales in Britain, posted a 27.5% drop in first-half underlying pretax revenue to 29.2 million kilos.
“Our efficiency for the primary half displays an ongoing backdrop of difficult UK market situations for the sector,” Chief Government Officer Andy Bruce stated.
Reporting by Shashwat Awasthi in Bengaluru; Enhancing by Bernard Orr