Inchcape PLC - Trading Update
Trading Update (January-
HIGHLIGHTS FOR THE FOUR MONTHS TO
30 APRIL 2020
· Group revenue
· COVID-19 situation remains dynamic; taken prompt action to optimise cash flow and reduce costs
· Strong OEM partnerships enabling careful management of inventory and financing across markets
· Liquidity headroom further strengthened with confirmation of eligibility to
· Further portfolio progress: sold three more
Revenue chg y-o-y
Like for like1
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1: Like for like (LFL) is a measure of sales growth in operations that have been open for at least a year (at constant foreign exchange rates)
STEFAN BOMHARD, GROUP CEO OF INCHCAPE PLC, COMMENTED
"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. I am proud of the work our people are doing in all of these areas, and impressed with how they have dealt with the challenges during this extraordinary time.
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
The focus on Distribution and the significant progress we have made in reshaping the portfolio has supported our performance during the crisis. We have strong liquidity and our distribution model provides higher profitability, a more flexible cost base, low capital-intensity and strong cash generation, which will be key factors in the recovery of the business. In addition, the Group's global footprint, diversified revenue streams and strong OEM relationships - all key pillars of the Ignite strategy - will continue to drive this business forward.
This is my last statement as CEO, with my last day on 30th June, and I would like to express my thanks to the entire team, and wish them and Duncan every success. This is a strong and sustainable business which I truly believe is well placed today and for the future."
COVID-19 BUSINESS UPDATE
As of today, we are open in 25 markets (including
· Collaborating with OEMs to manage our inventory and extend payment terms across markets
· Board/ senior management taking a 20% reduction in fees/ salary during the second quarter
· Reducing discretionary costs (e.g. marketing, office, travel) and capital expenditure
· Successful in our application for the
· Suspending our share buyback programme from 20th March (
· Cancelling our final dividend (
Our group-wide performance to the end of February was ahead of internal expectations, highlighting the resilience of the Group that had seen an impact of Covid-19 in
Following the onset of the virus, the Company moved quickly to adjust working practices, encouraging working from home where practical, implementing physical distancing and ensuring strict hygiene practices in the workplace. While the situation remains dynamic, as restrictions begin to ease it is expected that the ramp-up of business activity will be gradual. With the effects of Covid-19 likely to result in a prolonged economic impact, the Group is conducting a comprehensive review of its cost-base. We will share the progress of this at our interim results.
In this period, we have made good progress on inventory management following collaborative discussions with our OEM partners. The strong relationships enabled us to reduce previously committed orders and extend financing terms. We expect inventory levels to rise over the coming months, albeit to a lesser extent than we had originally anticipated. We are confident that the route to market that we offer for our partners will be as robust as ever.
As we said on 7th April, 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 remain comfortable that we have sufficient financial resources to navigate an extended period of disruption.
The Board announced on
We present the results of our markets in line with our redefined regions: following the reclassification of
The commentary that follows covers the period from
REVENUE (22)% 1
· While our operations have remained open, Covid-19 impacted sales in April. Our Q1 trading was pleasing
· Prior to the Covid-19 enforced closures, our revenue performance had been solid
· Performance in Q1 until lockdowns was above the prior year level
· The majority of our markets (bar
REVENUE (28)% 1
MARKET ABUSE REGULATION STATEMENT
This announcement contains inside information.
Financial PR, Instinctif (Mark Garraway) +44 (0) 77 7186 0938
[email protected] +44 (0) 20 7457 2020
1. References in the regional review are like-for-like i.e. sales growth in operations that have been open for at least a year (at constant foreign exchange rates)
2. Inchcape is the leading independent multi-brand Automotive Distributor and Retailer, operating in 33 markets with a portfolio of the world's leading automotive 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
3. Statements made in this announcement that look forward in time or that express management's beliefs, expectations or estimates regarding future occurrences are 'forward-looking statements' within the meaning of the United States federal securities laws. These forward-looking statements reflect the Group's current expectations concerning future events and actual results may differ materially from current expectations or historical results.
4. Conference call for Analysts and Investors at
This information is provided by RNS, the news service of the
Quick facts: Inchcape
Market Cap: £1.79 billion
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