Fleet News

Fall in residuals decimates Inchape's profit

UK operating profits at international dealership group Inchcape were almost wiped out last year because of punishing falls in residual values. The firm's operating profit in the UK dived from £25 million in 1999 to £700,000 last year, with more than half the fall caused by residual value losses through leasing contracts and a further £6.5 million through investment in Autobytel UK, its e-commerce business.

To date, £12.5 million has been ploughed into Autobytel UK, but the firm insists that brand recognition remains 'exceptionally strong'. Profits at MCL Group, the Mazda and Kia distributor, fell by £1.7 million, with Mazda sales down from 26,000 to 22,000 last year. The company purchased 49% of refurbishment and logistics firm Eurofleet last year, although its current logistics operation, Seaking, lost £4 million last year, but Kia sales nearly doubled from 6,400 in 1999 to 11,500.

Retail profits fell by £300,000 to £8.8 million, although this included a £700,000 cost associated with restructuring Rover dealerships. Worldwide, the firm's turnover grew from £2.8 billion to £3 billion, but pre-tax profits fell from £299.3 million to £73.4 million.

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