Inchcape Expects Robust Full-Year Driven By First-Half Growth

LONDON (Alliance News) - Inchcape PLC said Thursday that it expects to deliver a "robust underlying constant currency performance" in its full-year as broad-based growth across its markets and categories drove sales and pretax profit higher in its first-half.

In its half-year results for the six months to June 30, 2014, the automotive group said reported sales rose 9.2% at constant currency to GBP3.3 billion, a 0.7% rise in actual currency.

Profit before tax for the period came in at GBP162.1 million, up from GBP138.5 million last year.

The company increased its interim dividend for the period to 6.3 pence per share from the 5.7 pence per share paid in 2013.

The company also Thursday announced a new GBP100 million share buy back programme over the next 12 months. Inchcape said that in light of the "continued strong trading momentum and strong cash generation, the Board has concluded that there is scope to return additional surplus cash to shareholders."

Inchcape said revenue in the first-half benefited from the quality of its international portfolio of 26 markets, long-standing partnerships with leading premium and luxury brands, and it diversified earning streams across five distinct categories.

On a divisional basis, the company said trading profit in the Distribution segment increased by 28.5% at constant currency and 14.4% in actual currency to GBP132.3 million, with strong underlying constant currency performances across all of its region. The Retail business delivered a "resilient" trading profit of GBP47.6 million, down 2.1% at constant currency and 7.6% in actual currency, reflecting competitive pressure in some of Inchcape's markets, it said.

The company also cited a return to growth in its important Singapore and Greece markets, with market shares up 20% and 23.9%, respectively.

The company said it remains focused on its 'top five' priorities; growing market share, growing aftersales, improving margin, controlling working capital and selective capital investment, and strong capital allocation.

Looking ahead Inchcape believes that it remains well-positioned in the automotive market and said that it will continue to take advantage of growth prospects in the premium and luxury segments across the group.

"Notwithstanding the competitive pressure on vehicle margins in some of our markets we continue to expect to deliver a robust underlying constant currency performance in 2014," said Group Chief Executive André Lacroix.

Shares in Inchcape were trading flat at 637.50 pence per share Thursday morning.

By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance

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