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Inchcape sales fall and activity levels expected to be subdued for some time

The car distributor and retailer is currently open in 25 markets and closed in eight others, including the UK, Singapore and Chile

Inchcape -

Inchcape PLC (LON:INCH) reported a 32% decline in sales in the first four month of the year but said it had strong liquidity and a flexible cost base to weather the coronavirus crisis.

Revenue came to £2.1bn in the four months to 30 April, down 25% on a like-for-like basis, with distribution down 22% and retail down 28%.

Chief executive Stefan Bomhard, who is leaving at the end of next month, said a good start to the year veered off-course after various lockdowns around its markets, which 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.”

As of Thursday, the car distributor and retailer is open in 25 markets, including Australia, Hong Kong and Belgium but remains closed in eight other, including the UK, Singapore and Chile.

As well as suspending its share buyback and dividend, the board’s actions to optimise cash flow, reduce costs and strengthen liquidity position have included working with carmakers to manage inventory and extend payment terms, cutting management pay, reducing discretionary spending and getting approval for the Bank of England’s Covid-19 funding scheme.

As of the trading update, the group had available cash of £245mln and £420mln of headroom in its bank facility, while net debt stood at £210mln.

Shares in the company were down 5% on Thursday morning to 473p, down 33% since the start of the year.

Quick facts: Inchcape

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Price: 850 GBX

Market Cap: £3.32 billion

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