The mighty yen dents Inchcape
Tuesday 28 March 1995
The soaring currency has raised the cost of importing Toyotas and Mazdas at a time when western consumers have been extremely reluctant, anyway, to take on large financial commitments.
The result has been a string of profit warnings from Inchcape since early last year, continuing yesterday with a gloomy forecast of prospects for 1995. Announcing lower profits for last year, Sir David Plastow, chairman, warned that first-half profits were likely to slump below the depressed second six months of 1994, causing a further 22p fall in the shares to 278p, well below half the 630p peak reached in March 1993.
Stripping out exceptional items, pre-tax profits slid 8.6 per cent to £231m in the 12 months to December, slightly better than the company's forecast in January of a 10 per cent fall. Most of the damage was sustained in the motors division.
Of the £21.8m shortfall in profits last year, £13.9m was due to the well- flagged loss of business exporting Toyotas to China, but there was also a £4.7m hit due to translation into sterling.
Excluding the Chinese operation, total car sales fell 15,000 to 292,000, while European margins were slashed from 3.7to 1.4 per cent. That pushed operating profits from car importing and distribution down from £106m to £62.6m.
The recent sharp surge in the yen makes the task of forecasting the immediate outlook doubly difficult this year.
Analysts are looking for anything between £210m and £230m, putting the shares on a prospective price-earnings ratio of around 12.
That is probably about right, with change of ownership clauses in Inchcape's big contracts making a bid unlikely.
- 1 Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
- 2 Oil tanker with $100 million cargo goes missing off Texas coast
- 3 George Galloway left with severe bruising after attack in Notting Hill by man 'shouting about the Holocaust'
- 4 Lady al-Qa’ida: On the trail of Dr Aafia Siddiqui, the world’s most wanted prisoner
- 5 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
Do you realise just how foolish the UK looks?
With Douglas Carswell joining Ukip, my party has taken another giant step forward
- < Previous
- Next >
iJobs Money & Business
Highly Attractive Salary: Austen Lloyd: BRISTOL - This is a very unusual law c...
£35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...
£50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...
£60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...