Fleet News

Falling used values and internet costs hit Inchcape profits

FALLING residual values and higher investment in internet trading pushed down half-year profits at Inchape, the international automotive service group. Turnover for the six months to June 30 fell by £381 million, from £2,407.1 million in 1999 to £2,025.4 million in 1999, while headline pre-tax profits fell from £40.9 million to £30 million in the same period.

Lower returns on car disposals at Mann Egerton Vehicle Contracts and Kenning Leaseline were behind part of the fall, with operating profits at the two operations down to £8.2 million, from £10.2 million in the same period last year.

While the UK car market grew by 2.3% in the first half of the year, Inchape sales volumes were up by 6% and operating profit in the import, distribution and retail division was up 40% to £5.6 million.

Toyota GB, in which Inchcape holds a 49% stake, saw sales increase 11.3% to 53,288, from 47,862. However, margins suffered due to the highly competitive market place. Mazda volumes fell by 8.1%, from 14,801 to 13,606, which together meant a 76.1% fall in operating profit to just £1.0 million for the six month period for the two companies.

Inchcape-owned Autobytel UK made a £4 million loss in the first half of this year, mainly through higher investment costs. In the same period last year, the site made a £1.3 million profit, but only through a £3 million one-off provision, without which losses of £1.7 million would have been recorded. Since launch in April 1999, Autobytel UK has attracted 3 million unique visitors and generated more than 42,000 purchase requests.

Sir John Egan, chairman, said: 'We expect a solution to the current uncertainty in the UK market to be forthcoming in the next few months. The dynamics of the UK market post the Competition Commission inquiry should present considerable opportunities for Inchape.'

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