UK-based car distribution company Inchcape has said weakening demand in the UK will wipe out profit growth this year. That shocked investors despite the firm announcing higher profits in the first half of 2008, driven by expanded presence in emerging markets such as Russia.
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The company said profit before tax and one-off items rose 8.6 percent to GBP130.3m in the six months ended June 30.
However, the company said that demand in the UK market, which accounts for 21 percent of group profit, had slowed sharply since May and was likely to remain subdued.
We expect [UK] market conditions to continue to soften in the second half with the new car market falling further, Inchcape said. We will focus on all our value drivers to mitigate the impact of this fall and continue to outperform the overall market, the company said in a statement.
“Despite deteriorating economic conditions in a number of our markets, we expect our results to be broadly in line with 2007,” said chairman Peter Johnson.
“The execution of our strategy remains on track as we benefit from an increased exposure to Emerging Markets following the acquisition of Musa Motors Group in Russia. We continue to focus on creating a differentiated Customer experience for our brand partners in all of our markets.”
See also:
UK/RUSSIA: Inchcape acquires Russia’s Musa
UK: Inchcape pre-tax profit up 5.7% in Q1
