TIDMINCH
RNS Number : 0478B
Inchcape PLC
20 October 2009
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20th October 2009
Inchcape plc
Interim Management Statement
Inchcape upgrades guidance for 2009
This statement is an Interim Management Statement in accordance with the UK
Listing Authority's Disclosure and Transparency Rules. It covers the period from
1 July 2009 to 19 October 2009. Unless otherwise stated, figures quoted in this
statement are for the quarter ended 30 September 2009.
Current trading for the three months ended 30 September 2009
Total revenue for the third quarter was 13.4% below last year in actual currency
and 16.5% below last year in constant currency, but was 2.2% ahead of the second
quarter in actual currency. Our like for like revenue for the third quarter was
down against last year by 9.7% in actual currency and 13.7% in constant
currency.
In the third quarter, Group revenue has benefited from the impact of the
government scrappage incentive scheme in the UK and from slightly better trading
momentum in Australia and Hong Kong.
Our gross margin performance in the third quarter has been robust, as we
continued to benefit from solid used car margins in several markets and our
aftersales business, which represents half of our Group gross profit, remained
resilient.
Our cost base has benefited from our Group restructuring programme that has,
over the last twelve months, reduced our workforce by 2350 positions and closed
31 sites.
Our strong cashflow generation has reduced our finance costs for the third
quarter.
Regional commentary
Our UK retail business has experienced a much stronger third quarter than
anticipated as we benefited from the successful scrappage incentive scheme and
used car margins being maintained at the exceptional level seen in the first
half. However, the underlying demand for new vehicles remains weak as third
quarter registrations excluding scrappage were down 15.1% versus 2008 and 28.6%
versus 2007.
The demand for new vehicles remains weak in mainland Europe with the exception
of Greece where the market has been helped by government initiatives.
The Eastern European and Russian markets remain difficult but we continue to
improve our competitive position.
Our trading performance in Hong Kong has improved in the third quarter and we
continue to gain share in Singapore in a weakening market.
In Australia, we continue to enjoy a strong share momentum in a market that is
recovering gradually.
Group Financials
The Group's working capital performance remains strong and given our better than
expected trading and continued good cash generation, we now expect to be broadly
debt-free by the year-end.
Given this strong cashflow performance, our finance costs will be lower than our
previous expectations for the year.
At the end of September we closed our call option programme on the back of
weakening Sterling at no cost.
Our Group tax rate for the year will be lower than previous guidance reflecting
the geographic mix of our business.
Outlook
Our Group financial performance for the full year is expected to be
significantly ahead of previous expectations. However, we expect conditions to
remain challenging in most of our markets until well into the second half of
2010 as consumer confidence continues to be weak across the world and
unemployment is still rising in many of our key markets. We are confident that
with our continued focus on costs and working capital, the Group has the
financial strength and flexibility to trade effectively and continue to gain
share in these challenging conditions.
Commenting on the statement, André Lacroix, Group CEO said:
"Whilst we continue to experience an extremely challenging market environment,
we have benefited in the third quarter from stronger than expected trading in
several core markets. This demonstrates the benefits of our broad geographic
portfolio, the strengths of our business model and the impact of our self-help
measures implemented throughout the Group.
"With increased share across our key markets, scale positions in established and
emerging markets and industry consolidation opportunities in the medium term, we
are confident that the Group is well positioned to continue to outperform our
competitors and to benefit from market recovery."
- Ends-
For further information, please contact:
Group Communications, Inchcape plc
+44 (0) 20 7546 0022
Investor Relations, Inchcape plc
+44 (0) 20 7546 8209
Financial Dynamics (Jonathon Brill/Billy Clegg)
+44 (0) 20 7831 3113
Conference call for Analysts and Investors
For details please contact Georgina Bonham at Financial Dynamics on +44 (0) 20
7269 7262.
Certain statements in this announcement are forward-looking statements. These
forward-looking statements are made in good faith based upon Inchcape plc's
expectations and beliefs concerning future events impacting the Group, and
certain assumptions regarding the Group's business strategies and the
environment in which it operates, as at the date of this announcement. Inchcape
plc cautions that these forward-looking statements are not guarantees and that
actual results or events may differ materially from those expressed or implied
in this announcement.
Notes to editors
About Inchcape
Inchcape is a leading, independent international automotive distributor and
retailer operating in 26 markets. Inchcape has diversified multi-channel revenue
streams including sale of new and used vehicles, parts, service, finance and
insurance. Inchcape's vision is to be the world's most customer-centric
automotive retailer. Inchcape represents the world's leading automotive brands,
including Toyota, Lexus, Subaru, BMW, Mazda, Mercedes-Benz, Volkswagen, Audi,
Honda, Land Rover and Jaguar. Inchcape, which has been listed on the London
Stock Exchange since 1958, is headquartered in London, employs around 15,000
people and has scale operations in the UK, Singapore, Australia, Hong Kong,
Greece, Belgium and Russia.
www.inchcape.com
This information is provided by RNS
The company news service from the London Stock Exchange
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