INCHCAPE has led a bad day on the stock exchange for car dealers.
The Plc was down well over 40 per cent at the time of writing, after issuing a profits warning, ominously announcing predicted earnings for next year will be ‘significantly’ down.
This is on top of forecasted profits for 2008, which the dealer group says will also be down.
‘Trading conditions have deteriorated significantly in the UK, and are weakening in a number of our other markets,’ said the group. This led to its share price plunging to its lowest level in seven years.
Interestingly, though, the company reported that sales up to the end of September were only down by 1 per cent across all markets on the previous year. Of course, the UK market as a whole, responsible for a fifth of Inchcape sales, has seen a decline of over 20 per cent.
Inchcape has responded to the weakened market by announcing a £55m restructuring programme (which may involve job cuts), and a renewed emphasis on trade from aftersales operations, rather than new car sales.
The plunge in new car sales associated with falls in consumer confidence led traders to revise their positions in other groups, too. Pendragon and Lookers were also down.