Inchcape lost £188m in the first six months of the year, having made £154m pre-tax profit during the first half of 2019, and will be cutting jobs globally, it revealed today (Jul 30).
In its interim results for the six months to June 30, released via the London Stock Exchange at 7am, the franchised retailer group, which has more than 100 dealerships stretching from Sunderland to Exeter, also said group revenue dropped by 36 per cent from £4.7bn to £3bn.
Covid-19 was blamed for having a material effect on performance, and the group said that as a direct response to the coronavirus crisis it would be embarking on a major worldwide restructuring programme that will cost it some £70m and would ‘ensure it emerges stronger, with a leaner platform, fit for focused growth’. Once completed, it is expected to deliver a cost benefit of more than £90m.
The restructuring, which it says will be completed by the first quarter of 2021, will include axeing sales and support personnel jobs around the world – it has operations in Europe, Asia, Australia, Africa and South America.
Inchcape is currently open in 30 markets including Singapore as well as the UK but is still closed in Chile, Costa Rica and Panama.
It will also be looking to negotiate third-party expenditure as well as make ‘a further rationalisation of our footprint’.
In the interim results, new group CEO Duncan Tait, who joined Inchcape on June 1 and assumed full responsibilities on July 1, said: ‘Having joined the group in June, I have been extremely impressed by what I have seen of the team, and the high-energy levels across all areas of the business.
‘It is evident how much work has gone into helping steer the group through this challenging environment, and this is evident in our topline outperformance versus the market. I would like to thank Inchcape colleagues around the world for their response and spirit during this unprecedented period, and to all of those who have contributed time, resource and capability to the needs of our communities impacted by the pandemic.
‘Unsurprisingly, the effect of Covid-19 has materially impacted the group’s performance in the first half, with either partial or complete shutdowns affecting a substantial proportion of our operations. In those markets that have reopened, we have implemented strict physical distancing and hygiene measures to protect the health and safety of our customers and colleagues.
‘The Covid-19 situation remains very dynamic, and it is unclear how the world will change once the virus has been contained. Nevertheless, the number one priority for the group is to execute on the plans we have in place for the months ahead, with a particular focus on making our organisation leaner, and to get back to doing what we do, safely.
‘I am confident that the strong momentum we were seeing prior to the pandemic will return and that our long-term strategy will continue to create value for all our stakeholders.
‘The Ignite strategy has created a solid foundation from which we will continue to grow. The focus on distribution, an expanding portfolio of high-potential markets and a strong set of leading OEM partnerships remains fundamental to our future success.
‘I am delighted to have joined Inchcape at such an interesting time for the automotive industry. I am particularly excited about our ability to leverage the strong OEM partnerships, diverse geographical presence and robust balance sheet to grow our business.
‘Early as this is in my tenure, I believe there are opportunities for us to accelerate our development in certain areas, and look forward to sharing our plans in due course.’
During July, it won the Jaguar Land Rover distribution contract for Poland, which it said had bolstered its European presence.
Earlier this year, Inchcape revealed that its revenue had fallen by 32 per cent to £2.1bn in the first four months.
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