Inchcape nudges up 2010 forecast, to cut 500 jobs

LONDON: Multinational car dealer Inchcape plans to cut 500 jobs due to a challenging outlook for four of its markets, although 2010 profits will come in slightly ahead of its expectations. "Given the challenging outlook in 2011 for new car demand in four of our markets, namely the UK, Greece, Belgium and Singapore, we plan to reduce our cost base by 25 million pounds ($39.3 million)," the British-based firm said on Thursday.

The group, which employs about 14,300 people and sells and distributes cars for manufacturers including BMW and Mercedes-Benz, said it would take an exceptional restructuring charge of 18 million pounds in the fourth quarter. Third-quarter sales were slightly ahead of group expectations, driven by a strong recovery in Hong Kong, Australia and South America, as well as improving market conditions in Russia.

"Inchcape will deliver a robust earnings recovery in 2010, slightly ahead of expectations," it said, without giving figures. Inchcape shares plunged around 90 percent in 2008 as the car industry felt the full force of the economic downturn. They have since recouped around half their losses as the group eased fears about its future by slashing costs and raising about 250 million pounds in a deeply discounted rights issue. The stock has outperformed the UK general retail index by 22 percent this year, helped by the group's exposure to fast-recovering emerging markets. It closed at 351.6 pence on Wednesday, valuing the business at 1.6 billion pounds.