Car dealer group Inchcape posted a 69 percent drop in first-quarter profit to 20 million pounds ($30.3 million), but said that was better than it had feared due to an improved performance in Singapore and the UK.
The British-based firm, which trades in 26 countries, said on Thursday like-for-like sales fell 22 percent and that Hong Kong, Europe, Russia and emerging markets remained "very weak".
"Whilst this is an encouraging start, our expectations for the full year remain unchanged on a constant currency (basis)," it said in a statement.
Inchcape shares plunged over 90 percent last year amid an unprecedented slump in car sales that led it to axe 2,000 jobs, scrap its dividend, reduce stocks and cut capital spending.
The shares have bounced from a low of 5.82 pence this year, after the firm raised 249 million pounds in a deeply discounted rights issue to pay down debt.
Source: Reuters
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International automotive distributor and dealer Inchcape has recorded ‘strong’ profitability in the first quarter of 2009 partly due to the better than expected performance of the UK market.
In a trading update for the first three months of the year delivered at the company’s AGM, Inchcape said that while car markets around the world remained ‘challenging’, trading was ahead of internal expectations.
Nevertheless, total sales were 13 per cent down compared to the first quarter of last year and like-for-like sales were down 22 per cent. Unaudited pre-tax profit for the quarter was £20 million, down 69 per cent on what was a record first quarter last year but slightly better than previously expected.
But, the UK market, along with Singapore, performed better than predicted. In the UK, Inchcape said the benefit came from an improvement in used car margins. Aftersales business was also resilient.
Looking forward the statement concluded: “Although markets remain very difficult, the group delivered solid profitability in the first quarter of 2009, as the execution of our five operational priorities (growing market share and aftersales, while reducing costs, working capital and capital expenditure) continued to gain traction. Whilst this is an encouraging start, our expectations for the full year remain unchanged.” (Autowired)