Inchcape shares rose 13% in early trading today after the global car dealer and distributor beat first-half profit forecasts and said it was cutting a further 350 jobs to save around GBP5.5m (US$9m).
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The company said sales fell 23% to GBP2.8bn while pre-tax profit fell to GBP47m from GBP130.3m in H1 2008. Earnings per share was 0.7p compared with 3.5p.
“In light of the global downturn, we remain cautious for the second half,” Inchcape said.
“We believe FY2009 consensus earnings could rise from recent lows, and see a strong EPS recovery in FY2010,” Bank of AmericaMerrill Lynch analysts wrote in a research note, keeping a “buy” rating on the stock and a price target of 25p.
UK car sales per 1,000 population were forecast to fall to 26 this year, down from a high of 45 and a level not seen since 1981, suggesting the market was primed for recovery, they added.
