U.K. Car Seller Plummets Most Since 1990 as Brexit Bites Hard
U.K. Car Seller Plummets Most Since 1990 as Brexit Bites Hard
U.K. car dealer Lookers Plc said trading has become more challenging in recent weeks as it warned on its profit outlook and two executives stepped down.
Shares in the Manchester-based company dropped as much as 30% at the open, the biggest decline it’s suffered since 1990. Peers Pendragon Plc, Vertu Motors Plc and Inchcape Plc also fell, along with online car listings firm Auto Trader Group Plc.
Consumer confidence in the U.K. has slumped to a six-year low, according to a report from GfK published this week. Uncertainty over the Brexit process has weighed on consumers and big-ticket purchases like cars are suffering. U.K. car registrations rose in September but are still down 2.5% for the year.
Lookers said that weakening consumer confidence had harmed trading conditions in the key, normally profitable month of September. It now expects underlying pretax profit for 2019 to be around 20 million pounds ($25.9 million).
Numis analyst Simon Bowler said that the new profit forecast is well below the 38 million pounds the broker had previously estimated for the year. He downgraded his rating on the stock to hold from add, saying that given the trajectory of earnings, Numis now assumes Lookers will have to scrap its full-year dividend.
In addition, Lookers said Chief Executive Andy Bruce and Chief Operating Officer Nigel McMinn will step down. Chairman Phil White will take on executive duties.
--With assistance from Ivan Edwards.
To contact the reporter on this story: Sam Unsted in London at sunsted@bloomberg.net
To contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Morwenna Coniam, John Viljoen
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