Car dealership firm Inchcape boosts profits on disposals
Car dealer and distributor Inchcape revealed soaring profits following a series of disposals over the past 12 months.
The West Midlands-based business, which has operations in 32 countries around the world, said selling its retail operations in China, fleet business in the UK and sites in Australia all helped bank £108.8 million.
Bosses were cautious on the future with the coronavirus outbreak starting to show small signs of impact on the company.
Inchcape said: “The effect of coronavirus on demand and supply remains uncertain and we continue to monitor the situation closely.
“In February we have seen a small impact on our Asia business, with reduced footfall in Hong Kong, Singapore and Macau.”
As a result of the selloffs, pretax profits jumped 256% to £402 million, with revenues also up 1.1% to £9.38 billion.
The rise was also due to a hefty £175 million “goodwill” value writedown on one of its UK operations in 2018.
Excluding one-off boosts to the balance sheet, underlying profits were down 6.9% to £326.3 million.
Chief executive Stefan Bomhard said: “Our performance in 2019 against the backdrop of challenging dynamics in several markets demonstrates the resilience in Inchcape’s business model.”
For the year ahead, the company warned: “We expect profits to be down modestly year-on-year. This excludes an anticipated transactional Australian dollar/Japanese yen headwind, profit lost following the disposals in 2019, and any impact from coronavirus.
“Key drivers to this include the market contraction in Singapore, continued political uncertainty in Hong Kong and weakness in the Australian market.”