INCHAPE has announced a £78 million slump in annual pre-tax profits, with part of the drop blamed on the current dive in residual values affecting its leasing division. The company made a pre-tax profit of £106.1 million to the end of December 1998 (1997: £184.1 million) on turnover down 17% to £5,506.4 million (1997: £6,650.9 million). But this year exceptional charges of £403.7 million - caused by a write-off of goodwill and lower asset valuations on businesses sold during the year - resulted in a final loss before tax of £297.6 million.

It warned business could slump further this year, but is committed to refocusing the group's operations on motoring. A reduced shareholding in Toyota GB accounts for £20.3 million of the drop in pre-tax profits and around half the fall in turnover.

Profits at Kenning Leaseline and Mann Egerton Vehicle Contracts are down on last year, the company reported, although it would not release separate accounts for the firms. Overall, the motoring division saw operating profits fall 12% to £115.9 million (1997: £131.7 million), but the firm says nearly half the decline was down to the strength of Sterling affecting the conversion of profits from abroad.