Multinational automotive group Inchcape said today (Nov 5) it was performing ahead of expectations as it reported £1.9bn revenue for the third quarter.
In a trading update for July 1 to September 30 2020, it told the London Stock Exchange that total group revenue was down 10 per cent year-on-year on an organic basis and had dropped by nearly a fifth – 19 per cent – on a reported basis.
Year to date, total group organic revenue was down by 23 per cent,.
Inchcape’s retail organic revenue grew by five per cent during the third quarter but has fallen by 18 per cent over the year to date.
The update referred to the figures as an ‘encouraging bounce back’, and group chief executive Duncan Tait said: ‘Our Q3 results came in ahead of expectations, despite some continuing disruption caused by Covid-19.
‘Whilst encouraged by how our business has rebounded, we are mindful that the pandemic situation remains dynamic.
‘During the quarter we observed an improving trend across our new, used and aftersales revenue streams, and continued to outperform market volumes.
‘We also saw a quarter-on-quarter improvement in gross margin, resulting in a stable margin versus prior year.
‘Supported by the highly cash-generative nature of our business model, the group’s financial position was further strengthened.’
In its half-year results to June 30, announced on July 30, Inchcape revealed that it had lost £188m and was looking to cut jobs globally, as reported by Car Dealer.
Tait told the London Stock Exchange today: ‘As a direct response to the Covid-19 crisis we implemented a significant cost-restructuring programme – targeting at least £90m of overhead savings.
‘We are firmly on track, and anticipate completion in early 2021. Execution of this will enable the group to make a faster return to prior performance levels.’
Inchcape has operations in 32 countries across Europe, South America, Australia, Asia as well as Africa. In the UK, its chain of dealerships stretches from Sunderland to Exeter.
During the third quarter, it completed a distribution deal in the Americas, with Daimler El Salvador becoming its fourth new distribution market in 12 months.
Tait added: ‘Looking ahead, I am excited about the opportunites to build on the foundations laid by my predecessors, accelerate our growth in distribution, and to be more ambitious with our use of data and digital.
‘We are making good progress with the strategic priorities.’
Inchcape was cautious looking ahead, though, saying: ‘Following a better-than-expected Q3, the group was on course to deliver a strong second-half performance, significantly ahead of market expectations.
‘However, the Covid-19 situation remains very dynamic, as we’ve seen with the recent restrictions imposed on our operations in the UK and Belgium.
‘Given the uncertain trading outlook for the final two months of the year, we feel it is prudent not to give guidance at this time.’
It will give its full-year results to December 31 on February 25, 2021.
Inchcape has core partnerships with Toyota, Jaguar Land Rover, Suzuki, Daimler, the VW Group, the BMW Group, and Subaru.
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