February 27, 2020 / 8:11 AM / a month ago

UPDATE 1-UK's Inchcape warns of lower 2020 profit on weakness in multiple markets

(Adds shares, detail on outlook, results, background)

Feb 27 (Reuters) - UK’s Inchcape on Thursday warned of a small drop in 2020 earnings as the car dealer and distributor battles weaker demand in Hong Kong, Chile and Australia.

The company, with operations in more than 32 international markets, said the impact of the coronavirus outbreak remained uncertain, but added it saw reduced footfall in Hong Kong, Singapore and Macau in February.

Shares in the company fell 2.7% to 579 pence, hitting their lowest level since September.

Inchcape becomes the first this year among its UK peers to warn on 2020, although its focus on premium and luxury brands in the UK and Europe is expected to cushion the fall.

The company’s adjusted pretax profit for the year ended Dec. 31 fell to 326.3 million pounds ($424 million) from 350.6 million pounds last year. Revenue came in at 9.38 billion pounds, up 1.3%.

“We expect challenging market dynamics to continue through 2020, particularly in Singapore, Hong Kong and Chile, although we are encouraged by the outlook for our European businesses,” outgoing Chief Executive Officer Stefan Bomhard said.

Bomhard stepped down as CEO this month after five years at the helm to take up the top job at tobacco producer Imperial Brands.

The company, which has shifted its focus away from used and new car sales toward distributing cars for global producers, sold off less productive dealerships in the UK last year as well as retail-only stores in Australia and China.

$1 = 0.7696 pounds Reporting by Yadarisa Shabong in Bengaluru; Editing by Sriraj Kalluvila and Maju Samuel

Nuestros Estándares:Los principios Thomson Reuters
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