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March 12, 2010

UK: Inchcape posts 19% ’09 profit decline

UK-based car distributor Inchcape has posted a better than expected financial result for 2009 but cautioned that the outlook is tempered by a mixed economic picture globally.

UK-based car distributor Inchcape has posted a better than expected financial result for 2009 but cautioned that the outlook is tempered by a mixed economic picture globally.

Inchcape, which distributes cars in a number of countries, said that profit before tax and one-off items fell 19% to GBP155.1m in 2009 on an 11% fall in sales to GBP5.6bn.

Reuters reported that the profit result was slightly ahead of analysts’ forecasts.

The company stressed the importance of cost management in weak demand conditions.

“We have strengthened our competitive position despite the weak demand for new vehicles across most of our markets, through a balanced focus on delivering high levels of customer service, growing market share, growing aftersales, reducing costs, managing working capital and selective capital expenditure investment,” said André Lacroix, CEO of Inchcape plc.

The UK market was seen as a source of strong growth in the second half of 2009 where Inchcape said it continued to outperform the industry. It also said that both the Australian and Hong Kong markets have started to recover.

The 2010 outlook, however, looks mixed, the company says.

“In 2010, we expect to benefit from continued market momentum in Hong Kong and Australia and stable industry in Belgium and Finland but we also continue to anticipate market declines in the UK, Greece, Singapore, Eastern Europe and Russia,” said Lacroix.

“We therefore remain cautious for 2010 and do not expect a global recovery to start until well into the second half of this year given consumer confidence is still weak and unemployment continues to rise in many of our key markets. Nevertheless, we believe that the Group has the financial strength and flexibility both to continue to trade effectively and to further improve its competitive position.

“We remain confident in our ability to deliver a robust performance in 2010 and we are uniquely positioned to benefit from the recovery in global demand.”

 

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