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(Alliance News) - Inchcape PLC on Thursday reported a considerable year-on-year dive in revenue for the first four months of 2020 but remained confident in its ability to persevere amid the Covid-19 disruption.
Shares in the automotive retailer were down 6.5% at 463.60 pence, making it the worst performer in the FTSE 250 index on Thursday morning.
For the four months ended April 30, Inchcape's revenue was GBP2.1 billion, down 32% from the year prior. On a like-for like basis, revenue was down 25%, and at constant currency, it was down 32%. By business, retail revenue was down 41% and distribution revenue by 23%.
In March, Inchcape said a large number of its markets have been hurt by closures as national governments implement lockdowns in a bid to stop the spread of the virus.
On Thursday, it said the closures led to a 75% drop in April sales, on a like-for-like basis. It currently is open in 25 markets but remains closed in 8.
Looking ahead, Chief Executive Stefan Bomhard said: "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 Inchcape will be adjusting its cost-base accordingly. 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."
Inchcape said it has drawn down GBP100 million under the Covid Corporate Financing Facility. The UK government programme is designed to help larger firms to maintain liquidity amid disruption caused by the Covid-19 outbreak, through the purchase of short-term debt in the form of commercial paper.
It said that in addition to the funding, it has available cash of GBP245 million and GBP420 million of headroom in its revolving credit facility, and therefore remains comfortable it has sufficient financial resources to allow it to continue to trade through an extended period of disruption.
By Ife Taiwo; ifetaiwo@alliancenews.com
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