Inchcape has agreed to sell some of its retail operations in Russia for £70m as it continues its plan to focus on distribution.
In an announcement to the Stock Market this morning the international group revealed the sale of its Toyota and Audi dealerships in St Petersburg.
KlyuchAvto, a local operator in Russia, will pay £70m in cash on completion of the deal.
Mike Jones, compiler of the Car Dealer Top 100 and executive chairman of ASE Global, said the deal was ‘further tangible evidence of the strategy to focus on distribution rather than retailing’.
The group said the proceeds of the disposal will be spent on its strategy to ‘grow its core distribution business’.
Last year, Inchcape sold a number of its BMW dealers to Vertu as it reduced its showroom portfolio in the UK.
Inchcape said the Russian deal will be conditional on approval by the manufacturers and regulators. But it expects the deal to be completed in the second quarter.
Inchcape added: ‘In 2020, the disposed operations generated revenue of c£200m and profit before tax (pre-exceptionals) of £12m.
‘Gross assets at the end of 2020 were £77m. Owing to accumulated foreign exchange translation losses (£110m), the disposal will crystallise an exceptional loss before tax of £65m.’
Earlier this week, Inchcape said Nayantara Bali will join the board as a non executive director at the end of its annual meeting on May 27, joining its nomination and corporate social responsibility committees.
Inchcape is due to provide an update on its first quarter trading next Thursday (April 29).
Pendragon yesterday said it had managed to switch its fortunes in the first quarter of 2021 by turning an underlying pre-tax loss of £2.3m for the first three months of 2020 to a £10.8m profit – an increase of £13.1m.