UK: Inchcape sees 2009 results gloom
Global car distributor and retailer Inchcape Group said on Monday it expected 2008 results in line with expectations but 2009 to be "significantly" below previous forecasts.
Group sales for the first 11 months of 2008 were 3% up in sterling terms and 3.5% down in constant currency terms versus a year ago while like for like sales were 4.9% down in constant currency terms. Operating margin was 4.3%.
"Despite the weakening trading conditions in many markets around the world, we expect to report underlying results for 2008 in line with our previous expectations," Inchcape said in a statement.
It said more restructuring of European businesses would take the total restructuring cost for 2008 to GBP85m compared to the GBP75m as previously reported. The annualised benefit from this restructuring is expected to increase from GBP50m to about GBP55m.
"The decline in new car sales accelerated in November in most parts of the world. The rapid and unprecedented decline in so many of the group's markets makes it difficult to forecast our results with a great degree of certainty," Inchcape said.
"In most of our markets we now expect more substantial sales declines than previously estimated due to the global recession and significant reduction in credit availability. We now also expect the Russian market to decline in 2009 impacted by the increase in import duty on cars and the likelihood that a number of manufacturers will change to US dollar pricing of vehicles."
Inchcape said it was negotiating to replace wholesale and retail financing in Australia following the GMAC pull out.
"We would expect our underlying results for 2009 to be significantly below our previous expectations," the group said.
No final dividend for the year ending 31 December 2008 would be paid.
Group chief executive Andre Lacroix, said: "Despite weakening trading conditions globally, we expect to report underlying results for 2008 in line with our previous expectations. The unprecedented and rapid downturn faced by the car industry around the world will impact our results in 2009.
"However, markets will recover in due course and we believe that Inchcape is best positioned to benefit from its strong market positions and its long standing relationships with the leading OEMs in the industry".