Boss of Charles Hurst parent firm is shown door after fresh profit warning
THE chief executive of car dealership business Lookers has been shown the door after 19 years with the company after it warned the challenging car market is continuing to hit the business.
The company, parent of the Belfast-based Charles Hurst Group, had already issued a profit warning in July, and said trading since mid-September had "been much more challenging than expected".
Boss Andy Bruce, who has been with Lookers since 2000, taking the top seat in 2014, and chief operating officer Nigel McMill are leaving with immediate effect, and a search for their replacements is now under way.
Chairman Phil White said: "It is disappointing to report this downturn in trading, but we have taken action to drive the future financial performance of the group.
"The board is resolute in its determination to restore the group's fortunes with market leading practices in the sector."
Both Mr Bruce and Mr McMinn were in Belfast earlier this year when the Lookers Group has held its flagship annual conference in the city for the first time, bringing 700 senior delegates to the ICC.
That event was hosted by Charles Hurst, which was founded in Belfast in 1911 and was acquired by Lookers in 1996 (its Boucher Road headquarters is the largest automotive park in Europe).
Management at Lookers said it expects underlying pre-tax profits to hit just £20 million this year, compared with £67.3 million in 2018.
It blamed the poor performance at its 150 showrooms on "ongoing weakness in consumer confidence in the light of political and economic uncertainty, pressure on used car margins and retail cost inflation".
It added that due to these ongoing challenges, the board has sped up the sell-off of non-core assets in the business, or "portfolio consolidation", to improve the company - although site closures are expected to cost £8 million this year.
In the three months to the end of September, like-for-like sales of new cars fell 3.2 per cent compared with a fall of 1.2 per cent in the first half year.
The used car market was more stable, with like-for-like unit sales up 2.6 per cent compared with a rise of 2 per cent for the first half year.
But it was not enough to save Mr Bruce and Mr McMnn, who both leave with immediate effect.
The car market has been struggling recently, with environmental concerns and Brexit playing a part, especially with families putting big ticket purchases on hold during the uncertainty.
Lookers is also under investigation by the FCA over the way it sold car loans between January 1 2016 and June 13 this year. The company said it continues to "fully support" the FCA, but added "we are unable to predict what, if any, impact the outcome of the investigation may have".
Independent analyst Nick Bubb said of the announcement: "It would be easy for the car dealer Lookers to blame 'Brexit uncertainty' for today's profit warning, but the fact that the veteran CEO has stepped down implies that the problems are company-specific."