F&I Management & Training

The dealer group said however that its aftersales business, which represents more than half of its gross profit, remains strong.

The company said in a pre-close trading statement that total sales in the five months to May were down 16.3 per cent in sterling terms and 22 per cent in constant currency.

Pre-tax profits in the second quarter are expected to be significantly ahead of the £20m reported in the first quarter but well adrift of the same period last year.

UK performance

In the UK, the company continues to outperform the new car market with like-for-like sales down 21 per cent in a market down 27.9 per cent.

Inchcape has reduced debt to £100m by then end of May compared to the £404m at the end of March by paying off £234m from a rights issue. It also improved cash flow.

As a result of this it expects its year-end debt to be below its previous expectations.

Inchcape group chief executive André Lacroix said the scrappage scheme in the UK had helped boost traffic through its dealerships. The company is set to deliver a solid performance, he said.

Stronger balance sheet

"The group balance sheet has been strengthened considerably due to the successful completion of our rights issue and the positive impact of our operational initiatives on cash flow.

"Given the challenging trading conditions in our markets, we remain focused on executing our five operational priorities of growing market share and aftersales, while reducing costs, working capital and capital expenditure to improve our competitive position and maximise our cash flow.

"Our actions in the first five months provide a platform for us to deliver a solid performance for the full year against the background of what is expected to be a lengthy global industry downturn."

DATED: 25.06.09

FEED: MT