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Inchcape PLC - COVID-19 Business Update

RNS Number : 9830I
Inchcape PLC
07 April 2020
 

7 April 2020

 

This announcement contains inside information

Inchcape plc

COVID-19 Business Update

Inchcape plc ("Inchcape" or "the Company") today provides the following business update.

 

The Board continues to closely monitor and assess the rapidly evolving COVID-19 situation in all our markets. The safety of our colleagues and customers is of paramount importance and we are taking all necessary precautions to safeguard them.

 

Trading in a large number of our markets has been impacted by closures or significantly lower business activity. Inchcape's global diversification is supporting our performance, with 14 markets still operational (albeit at much reduced levels), including Australia, Ethiopia and Hong Kong. While Singapore was operational throughout the first quarter, a one month lockdown commenced on 7th April. The situation is clearly very dynamic.

 

The Company has taken swift action to reduce discretionary costs and capex (benefiting from the flexibility of our Distribution model), and the Board/ senior management are taking a 20% reduction in fees/ salary during the second quarter to help support the business. Our strong relationships with OEMs are enabling us to manage our inventory across markets and we are well-advanced in reducing stock orders and extending payment terms.

 

Inchcape has a strong balance sheet, having ended 2019 in a net cash position, aided by strategic retail disposals. As of today, the Group has liquidity of £600m (comprising available cash of £140m and RCF headroom of £460m).

 

We have stress-tested the impact of various conservative scenarios - including a prolonged period of global shutdowns followed by materially reduced activity throughout the second half of 2020 - and are comfortable that we have sufficient financial resources to navigate an extended period of disruption.

 

Given the high level of uncertainty around the duration and impact of COVID-19, we are exploring other debt options to further increase our liquidity and flexibility, including the Coronavirus Corporate Financing Facility launched by the UK Government. In this context the Board has decided to preserve cash and no longer recommends the payment of the previously announced final dividend of 17.9p per ordinary share. Consequently, Resolution 4 referred to in the notice of Annual General Meeting will not now be proposed to the meeting.

 

The Board announced on 20 March 2020 that it put on hold any forward guidance until such time that the overall impact of COVID-19 on the Company became clearer.

 

Looking beyond the current environment, we believe Inchcape remains well placed given our strong relationships with OEM partners, focus on Distribution, exposure to markets with a structural growth opportunity and supported by a strong balance sheet.

 

The Company will publish its trading update on 21 May 2020.

 

Ends

Investor Relations, Inchcape plc
+44 (0) 20 7546 0022

 

Instinctif (Mark Garraway)

+44 (0) 20 7457 2020

 

About Inchcape

Inchcape plc is the leading independent multi-brand Automotive Distributor and Retailer, operating in 33 markets with a portfolio of over 40 of the world's leading car brands. Inchcape has diversified multi-channel revenue streams including sale of new and used vehicles, parts, service, finance and insurance. The Company has been listed on the London Stock Exchange since 1958, is headquartered in London and employs around 17,200 people. www.inchcape.com

 

 


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Quick facts: Inchcape

Price: 454

Market: LSE
Market Cap: £1.79 billion
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