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Car dealer Inchcape raises profit view; warns of chip shortage

By Reuters

-Car dealership Inchcape said on Friday its current-year earnings will beat market estimates, helped by an uptick in demand following easing of pandemic-related restrictions.

The company, which sells new and used cars, including premium brands including BMW, Audi and Mercedes-Benz, said it expects 2021 profit before tax to be significantly higher than the market consensus of 216 million pounds.

That would still be lower than pre-pandemic annual earnings of 326 million pounds, but better than the profit of 129 million pounds for 2020.

The company’s shares were expected to be up between 2% and 7%, according to premarket indicators.

Inchcape, however, warned that chip shortages and the pandemic remained major sources of uncertainty as it heads in to the second half of the year, adding that the impact to the company has been limited so far.

A global pandemic-driven trend towards digitisation is fuelling unprecedented demand for semiconductors, causing a shortage of these chips for the auto industry, including for UK car dealers already suffering in the wake of Brexit.