Inchcape revenue has dropped a whopping 32 per cent to £2.1bn and a £70m dividend has been cancelled.
In a trading update to the Stock Market this morning, the dealer group reported on the first four months of this year, which included April when dealers were closed – and said the impact on profit will be ‘pronounced’.
It said board members had taken a 20 per cent pay cut, other costs have been slashed across the business and revealed the group has successfully applied for funding under the UK government’s Covid Corporate Financing Facility scheme, so far drawing down £100m.
The group says it has stress tested its finances in the event of further shutdowns around the world and believes it has ‘sufficient financial resources’ to survive ‘extended disruption’.
Group CEO Stefan Bomhard – in his last statement before handing over to Duncan Tait on June 1 – said: ‘Covid-19 is having an unprecedented impact on people and economies worldwide.
‘We are focusing our efforts on protecting our people, collaborating with our partners and further strengthening our finances.
‘While not evident in the headline numbers, we had a good start to the year with the Group’s performance prior to shutdowns ahead of internal expectations. However, the various closures since have had a material impact on profitability, especially in April.
‘As our markets reopen, we anticipate business activity levels will be subdued and as such the mobilisation of our colleagues will be gradual.
‘It is clear that the impact on global economies will continue to be felt for the rest of the year and into 2021, and Inchcape will be adjusting its cost-base accordingly.’
Inchcape said it will be working with manufacturers to manage its inventory and extending payment terms in all the markets it operates.
Board members and senior mangers have taken a 20 per cent pay cut, marketing and other discretionary costs have also been cut.
Inchcape has operations on Asia, Australasia, America, Africa and Europe.
The statement added: ‘As of today, we are open in 25 markets (including Australia, Hong Kong and Ethiopia), and remain closed in eight markets (including UK, Singapore and Chile). Since our update on April 7, while we have had no additional closures, trading has recommenced in several markets (including Belgium, Greece and Colombia).’
The update said that in the UK, trading was in line with expectations until the forced closure on March 23 which caused the group to ‘miss out on the very important final week of March’.
it added that had sold three more UK sites, but gave no further details on where these were.
Last year, Inchcape made a pre-tax profit of £402m.
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