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 President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
- 2 ALS ice bucket challenge co-founder Corey Griffin drowns, aged 27
- 3 Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations
- 4 Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
- 5 AirAsia flight QZ8501 missing: Search for plane carrying 162 passengers from Indonesia to Singapore suspended overnight
President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
UK weather: Warning for more snow and ice as freezing temperatures and gales hit Britain
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations
AirAsia flight QZ8501 missing: Search for plane carrying 162 passengers from Indonesia to Singapore suspended overnight
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Millions of Britons struggling to feed themselves and facing malnourishment
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Nigel Farage: Ukip leader named 'Briton of the year' by The Times
Immigrants make UK racist, says Ukip councillor Trevor Shonk
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...