Inchcape Fleet hit by multi-million RV loss
19 March 2009
Author: Tristan Young
Top 20 lease firm Inchcape Fleet Solutions has suffered an £8.5m residual value cut on its 31,000-strong fleet.
The figures were revealed in parent firm Inchcape plc's annual results, and the fall in residuals, equivalent to £275 a car, resulted in IFS making a loss of £5.7m for 2008.
"This provision increase is due to the fall in used car pricing, resulting in lower than expected realisable values on leased vehicles which will be returned over the next two to three years," said a company spokesman.
IFS joins Autolease and Northgate in taking a hit on residuals for 2008, and other leasing and rental firms are expected to follow suit.
Inchcape plc's overall results saw a 3.4% increase in turnover to £6.3bn in 2008. Operating margin, however, was down to 3.8% from 4.4% in 2007.
At the same time as revealing the results Inchcape also proposed a rights issue to raise approximately £232m.