Inchcape posts better-than-expected third-quarter results as business recovers from coronavirus disr

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Inchcape PLC (LON:INCH) saw its shares rise on Thursday as the car dealerships group reported better-than-expected third-quarter results with its business recovering from the disruption caused by the coronavirus (COVID-19) pandemic.

However, the FTSE 250-listed firm warned that it still can not provide any forward guidance due to the uncertain outlook as England entered a second lockdown period.

READ: Inchcape upgraded as JPMorgan Cazenove calls the bottom of the market

In an update for the period from July 1 to September 30, 2020, the company said group revenue fell by 10% on an organic basis to £1.9bn, and by 19% on a reported basis, but that was ahead of its expectations. Distribution revenues fell 21%, but retail revenues rose 5% on an organic basis.

The performance of both its distribution and retail businesses improved in the third quarter, driven largely by fewer COVID-19 related trading restrictions.

Inchcape said the distribution segment was impacted by closures in markets such as Chile, Costa Rica and Panama during the first six weeks of the quarter, and temporary disruption to operations in Australia, New Zealand and Guam. It was also dented by cyclical factors in Singapore and its exposure to the Americas, where demand is currently more subdued.

The retail business has seen a strong and sustained recovery in markets that were open throughout the period, it added.

The company said that following a better-than-expected third quarter, it was on course to deliver a strong second-half performance “significantly” ahead of market expectations.

“However, the COVID-19 situation remains very dynamic, as we’ve seen with the recent restrictions imposed on our operations in the UK and Belgium. Given the uncertain trading outlook for the final two months of the year, we feel it is prudent not to give guidance at this time,” it’s update concluded.

In morning trading, Inchcape shares were 3.3% higher at 551p.

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