Car retailers feel the Covid-19 pinch after strong start to year
Two of Britain’s biggest listed car sellers were doing well in the first months of 2020, until the coronavirus pandemic forced their shops to close.
Inchcape boss Stefan Bomhard said the company had a strong start to the year, as he warned that activity will be “subdued” even after the business opens up again.
“While not evident in the headline numbers, we had a good start to the year with the group’s performance prior to shutdowns ahead of internal expectations,” Mr Bomhard said.
He added: “However, the various closures since have had a material impact on profitability, especially in April.”
Revenue across the group fell by 32% during the four months up to the end of April this year.
Today it is open in 25 countries, and closed in eight, including the UK.
Mr Bomhard said Inchcape would not bring back all of its employees at once.
“As our markets reopen, we anticipate business activity levels will be subdued and as such the mobilisation of our colleagues will be gradual.
“It is clear that the impact on global economies will continue to be felt for the rest of the year and into 2021, and Inchcape will be adjusting its cost-base accordingly,” the outgoing boss said.
He will hand over to Duncan Tait at the start of July.
Meanwhile, fellow car seller Pendragon warned that the slow-down will cost it around £10 million in underlying profit before tax.
It has reported a pre-tax loss of £2.3 million for last quarter, around £500,000 better than the same period last year, despite the Covid-19 crisis.
Today, 125 of its 145 service stations are open for business, although only around 10% of its technicians have returned to work.
Chief executive Bill Berman said: “The commercial consequences of a full lockdown have obviously affected the business, but we moved quickly to implement a broad range of actions to mitigate the enforced closure, and I am confident that we will emerge in a strong position as the current restrictions ease.
“We are now preparing to reopen from June 1 and will therefore have the capabilities in place to meet the full needs of our customers across new, used and aftersales, as well as driving our ‘we come to you’ online offer.”
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