27th Feb 2020 10:01
(Alliance News) - Inchcape PLC on Thursday said full-year profit soared, following disposals and the non-repeat of impairment charges, but the automotive retailer warned that some of its operations have already been hurt by the coronavirus.
In 2019, pretax profit more than trebled to GBP401.8 million from GBP113.0 million. This was on revenue which grew by 1.1% to GBP9.38 billion from GBP9.28 billion. Revenue was 1.3% higher at constant currency.
Before exceptional items however, pretax profit was down 6.9% to GBP326.3 million from GBP350.6 million.
Inchcape booked a GBP108.8 million gain in 2019 from the disposal of a number of businesses including retail operations in China, the Fleet Solutions business in the UK, and other retail sites in Australia and the UK. Among the charges it faced in 2018 was a GBP175.0 million goodwill impairment charge relating to the UK Retail CGU business.
In total, Inchcape recorded a GBP78.0 million exceptional gain, swinging from 2018's GBP232.1 million charge.
Inchcape held its full-year payout steady at 26.9 pence per share.
Chief Executive Stefan Bomhard said: "Our performance in 2019 against the backdrop of challenging dynamics in several markets demonstrates the resilience in Inchcape's business model."
Bomhard is departing as chief executive this summer, joining tobacco firm Imperial Brands PLC with effect July 1. Inchcape earlier in February said a search to find a new CEO is underway.
For 2020, Inchcape warned: "We expect profits to be down modestly year-on-year. This excludes an anticipated transactional Australian dollar/Japanese yen headwind, profit lost following the disposals in 2019, and any impact from coronavirus. Key drivers to this include the market contraction in Singapore, continued political uncertainty in Hong Kong and weakness in the Australian market.
"The effect of coronavirus on demand and supply remains uncertain and we continue to monitor the situation closely. In February we have seen a small impact on our Asia business, with reduced footfall in Hong Kong, Singapore and Macau."
Inchcape shares were 5.3% lower at 563.50 pence each in London on Thursday morning.
By Eric Cunha; [email protected]
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