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Inchcape April revenues plunge 76%, sees Covid hit in 2021
21st May 2020 07:33
(Sharecast News) - UK car dealer Inchcape said April revenues plunged 76% as it warned the coronavirus impact would be felt into 2021 and launched a review of its cost base.
The company said it was currently operating in 25 out of its 33 markets as it reported a 30% fall in revenue to £2bn for the four months to April 30. It maintained its "no guidance" stance on future earnings.
Inchcape last month scrapped dividend and cut management pay to bolster its balance sheet and conserve cash.
"Overall, group revenues in April were down 76% LFL, mainly due to the disruption caused by Covid-19. The impact of closures on profitability will be pronounced, and result in a drop-through to operating profit of approximately 10% of lost revenues," said outgoing chief executive Stefan Bomhard.
"While the situation remains dynamic, as restrictions begin to ease it is expected that the ramp-up of business activity will be gradual. With the effects of Covid-19 likely to result in a prolonged economic impact, the group is conducting a comprehensive review of its cost-base."
The group said it had been confirmed as an eligible issuer under the UK Government's Covid Corporate Financing Facility (CCFF) and had drawn down £100m at May 21.
Inchcape added that it had £245m in available cash and £420m of headroom in its revolving credit facility with current net debt of £210m.
The company said it was currently operating in 25 out of its 33 markets as it reported a 30% fall in revenue to £2bn for the four months to April 30. It maintained its "no guidance" stance on future earnings.
Inchcape last month scrapped dividend and cut management pay to bolster its balance sheet and conserve cash.
"Overall, group revenues in April were down 76% LFL, mainly due to the disruption caused by Covid-19. The impact of closures on profitability will be pronounced, and result in a drop-through to operating profit of approximately 10% of lost revenues," said outgoing chief executive Stefan Bomhard.
"While the situation remains dynamic, as restrictions begin to ease it is expected that the ramp-up of business activity will be gradual. With the effects of Covid-19 likely to result in a prolonged economic impact, the group is conducting a comprehensive review of its cost-base."
The group said it had been confirmed as an eligible issuer under the UK Government's Covid Corporate Financing Facility (CCFF) and had drawn down £100m at May 21.
Inchcape added that it had £245m in available cash and £420m of headroom in its revolving credit facility with current net debt of £210m.