(Alliance News) - Inchcape PLC on Thursday said it is now expecting its annual profit to be materially ahead of market consensus and it will consider resuming dividend payments after a better than expected November performance.
Shares in Inchcape were up 4.6% at 660.00 pence in London at midday.
In its third quarter update, dated November 5, the London-based FTSE 250-listed automotive retailer reported that it was on track to deliver a performance significantly ahead of market expectations but decided against providing annual guidance given additional lockdown restrictions.
However, it has since become apparent "that the restrictions have had less of an impact on our performance than might have been expected with resilient demand for both Vehicles and Aftersales services."
Inchcape said this was supported by its ability to keep delivering vehicles and provide a click-and-collect service, as well as to continue performing Aftersales services in the affected markets.
Given that the company has performed better than expected in November, and the limited restrictions in place at present, it expects to post a pretax profit before exceptional items "materially ahead of the published market consensus" of GBP108 million.
Additionally, Inchcape is also expecting its net cash position at the end of 2020 to be substantially above the previous year.
Inchcape said: "Against the backdrop of a better trading performance and strong cash generation, we will consider resuming dividend payments in accordance with the performance of the business at the year end.
"Notwithstanding our FY 2020 performance, we continue to operate in an uncertain economic environment as a result of the Covid-19 pandemic."
The company will publish its annual results on February 25.
By Anna Farley; annafarley@alliancenews.com
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Inchcape (INCH)