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Inchcape reports strong trading in UK

Inchcape this morning reported it has maintained a "strong" trading performance despite challenging market conditions and it expects to close 2009 slightly ahead of its forecast.

Revenue for the 11 months to November is 11.4% below last year, said the automotive group.

Sales have benefitted in the second half of 2009 from strong demand of new cars in the UK and early signs of an industry recovery in Hong Kong and Australia.

It is making good margins on used cars and aftersales, the company reported, while cashflow generation is strong and costs are well below the levels of last year.

However the group remains cautious for 2010. "As stated previously, we do not expect any global car industry recovery to start until well into the second half of 2010 as consumer confidence is still weak and unemployment continues to rise in many of our markets.

"However, we are confident that the group has the financial strength and flexibility to trade effectively and to continue to gain market share," said its statement.

André Lacroix, Inchcape CEO said: “In 2009, the group has improved customer service globally and we have gained share in many of our markets, while cutting costs and reducing inventory to mitigate the effects of an unprecedented global downturn in the car industry.

"Our strong performance demonstrates the resilience of Inchcape’s business model. We continue to benefit from scale operations across a broad geography, our Customer First strategy, the superior quality of our operating processes and the entrepreneurial spirit of our people."

Analyst Panmure Gordon raised its year-end forecasts for Inchcape following the statement. It now expects 2009 profit before tax to be around £150.6m, increasing to £155m in 2010.


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