By Kristy Dorsey

Troubled automotive group Lookers, owner of the Taggarts chain of car dealerships in Scotland, has warned of a “material” loss for the first half of 2020 and the widening of an internal fraud investigation that has delayed publication of last year’s accounts.

Lookers, whose shares have been suspended from trading since July 1, has now said it will not be possible to produce its 2019 accounts by the end of August, as it had previously hoped. Publication of these figures was originally postponed in March, and then again in June.

In June, Lookers revealed a £19 million hole in its accounts after an investigation by accountants Grant Thornton into potential fraud identified a series of non-cash adjustments that will impact the 2019 results. The adjustments included misrepresented and overstated debtor balances in respect of supplier bonuses and fraudulent expense claims, together with items related to “incorrect or inconsistent application of policies, processes and accounting standards”.

READ MORE: Investigation drives £19m hole through Lookers accounts

At that time, Lookers said it intended to publish its 2019 accounts “by no later” than the end of August.

“The extended scope of the audit has identified further work on the group’s corporate leasing division and vehicle financing arrangements and the 2018 and earlier balance sheets to ensure correct identification and allocation of adjustments,” Lookers said in a statement yesterday. “Further work is ongoing to finalise the 2019 accounts.”

The update on the investigation coincided with a trading statement in which Lookers reported “encouraging” levels of activity in June and July as lockdown measures eased. However, the enforced closure of showrooms will result in a material pre-tax loss for the first half.

READ MORE: Taggarts owner signals share trading suspension

Chief executive Mark Raban described it as a “’very challenging” period for Lookers, which is wary about the overall pace and sustainability of economic recovery.

“We remain cautious about the future given ongoing uncertainties in the wider environment, but confident in the opportunities for the Lookers business moving forward,” he said.

The group said in November that it would close 15 of its dealerships across the UK, followed by the announcement in June of a further 12 closures. After consultations with staff in June and July, Lookers has also confirmed that it will make more than 1,400 employees redundant. This will take its total headcount to approximately 6,700, down 22 per cent since restructuring began in November.